Aurora Donnelly is a solo practitioner always looking forward to the next exciting transition.
Indirectly, the real estate implosion is at the heart of the transition issues that are affecting many of us. When the housing market declined, so did many other parts of the economy. In general, as attorneys, our fates as professionals in the workforce are closely bound to the real estate market.
The economic downturn led by the housing crash affected those of us who are real estate attorneys directly. Lawyers who were doing 20 to 30 closings a week, or a month, even, saw their revenues drastically curtailed. Dozens, probably hundreds of lawyers who were working for or with mortgage companies, or for developers or banks, lost their jobs. Many of us who had invested in real estate suffered losses.
On a personal level, we may be affected by what we can now afford to pay for shelter, i.e., rent, mortgage payments. The only people spared are those who own their houses outright. But even they may have problems, either from still rising real estate taxes or from inability to sell if the need for a job relocation arises.
No one is being spared. My colleagues who are pursuing career positions in other cities are finding it difficult to sell their properties. Those who rent are being hamstrung by their lease contracts. If the out-of-town job offer comes at the wrong time, they either break the lease or they have to turn the job down. The latter is a rare occurrence, but may happen based on individual economics. For the most part, it seems that landlords are sympathetic, but they will get the last dollar they can from someone breaching a lease contract. Their sympathy is limited because the competition for renters right now is also fierce.
It is difficult to know what advice to offer in this area, except to stay as unencumbered as you can in your real estate holdings, sign the shortest lease you can if you rent. Of course, should the market suddenly head upward when your lease expires, your rent might increase to boom market level. Not likely, though.
Unfortunately, credit ratings can take a beating when negative things happen with your living arrangements. If you break a lease, the landlord may sue for the remaining rent due. If you walk away from a mortgage, obviously, this will have negative consequences on your credit standing.
I suppose one piece of advice I can offer is to stay on the best possible terms with your landlord, so if something comes up you might get cooperation. Also, sometimes it is worth paying a couple of extra months’ rent if that will keep the landlord from attempting to enforce the lease term in court.
If you own your own living space, and you are faced with having to move, you are probably well aware of your options – if doable, accept a long commute, keep paying the mortgage and rent temporarily wherever your new job is, rent out your house or condo, try to do a short sale, try to get a modification of mortgage, etc. The possibilities will be specific to your situation.
During this time, keep sight of the really important things in your life, like family, health, and good friends, and participate in interesting activities that engage you. The income part of the picture will right itself eventually. Meanwhile, count all your blessings.