A morbid but terribly logical article out of the New York Times explains why the divorce rate in New York is going up amongst the affluent these days. The tremendous gains in real estate appreciation are providing the needed cash to support two households in the case of divorce. The wealth generated by property appreciation and the run up of the stock market is allowing couples to divorce and live comfortably as singles.
While the traditional family man in me is bothered by this, the logical business side sees the logic. It is much harder for a couple to divorce if they both know that they will be left with a much lower living standard. However, if they can maintain their present quality of life the decision to split is much easier.
A little-noted side effect of the property boom of the past decade has been the real-estate-enabled divorce. Home values might have slid in some markets, but in the New York City region, where prices remain high, divorce professionals like therapists and lawyers, along with real estate brokers, say unhappily married couples are cashing in appreciated homes to underwrite a split.
“The equity that there is in real estate is one of the impetuses why there are so many divorces,” said Nancy Chemtob, a Manhattan divorce lawyer, adding that the net worth of her clients has doubled in the past three years mainly thanks to real estate. The price of the average Manhattan apartment was $1.3 million as of June, up 7 percent from a year ago, according to the real estate brokers Brown Harris Stevens. via the New York Times.
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Makes perfect sense, but… hmmm.
-Athol
Athol
I agree. A story that was worth mentioning but at the same time carries the ick factor.
I totally agree since I am thinking about a divorce since our net worth of $1.2M. A split means a net worth of $0.6M each. On the other hand, if our net worth was $0.6M total or less , a split would leave both of us poor. I can see why hollywood stars goes thru spouses like a new set of clothing.
I'm still single, so there's going to be alot of hot chicks on the market with cash from their ex husbands..it's going to be awesome in the future!
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