The Seattle Times recently published an article stating that house prices in Seattle have finally rebounded to (and surpassed) house values before the market crash of 2007. This is good news for homeowners. This includes most homeowners facing dissolution proceedings. Here are a few ways the increase in house values may affect your dissolution case.
- Real estate will be viewed as an asset not a liability. For the past seven years we have been dealing with houses that have little or no equity, and as such are often viewed as a liability not an asset. Instead of leaving the house and equity to the less-economically-advantaged spouse, the house was often left to the more-economically-advantaged spouse, because in many cases that was the only spouse that could afford the house and the debt (and it would not be possible to sell the home for the amount owed on the home). Now, with more homeowners having equity, it will be more likely the court will award the home to the spouse most in need of the equity – or the place to live.
- Refinancing will be easier. Prior to 2007 it was common to have a property settlement agreement or decree of dissolution require that whoever received the home refinance and remove the other spouse from the mortgage on the property. After 2007, this became more difficult. In many instances, homes were worth less than the loan and requests for refinance were refused. This meant that some former spouses were required to continue being responsible for debt on a property that no longer belonged to them.
- Houses will cost more. One downside to the increase in home values is that the party that is not awarded the home may need to pay more to buy or rent a different place. Courts are likely to take this into consideration when determining an equitable division of marital property.
If you have a family law case that involves real estate, you may have questions about how the increase in home values may affect your case. Please contact us if you have any questions.