Chillax: a transitive verb meaning; to calm down; to relax. Not only is it found in the Urban Dictionary, Webster has also found the need to include it as well. The sample sentence (from the Urban Dictionary, which is far more entertaining to read than Webster’s) is as follows: “Dude, just chillax, just because it’s not your birthday doesn’t mean that you won’t have fun in the monkey jamboree. I’m out like a decent hurricane, schlater.” For the record, schlater, means; see you later; and jamboree, of course, is an event of glee and frolic. I had to look both of those words up as well. Either way, we all need to just take a step back and chillax. Despite the incursion of recession alarm bells going off around the planet, it will benefit us all to refrain from panic.
As the US economy is smack dab in the midst of the longest growth in recorded history, why the worry? Why the ominous graphic declaration from CNBC stating; Markets in turmoil?” As consumer confidence falls, so does the Dow Jones Industrial Average. As a result, the headlines loom dark and consumer confidence falls deeper, causing the Dow to dip even lower. The cause and effect keep switching places. Frankly, I’m getting dizzy watching it.
Most of us remember the “Great Recession” that started in 2007. As a result, we may have a little PTSD. This is understandable. Yet, here’s the good news; just because it’s been a while since the US economy has taken a dive, doesn’t mean it is inevitably going to take a dive at the same depth. In fact, it may not even need SCUBA gear for this one. Economist have notoriously been quoted as saying, “expansions don’t die of old age; something has to happen to cause them.”
At the end of 2018, talk of a recession began to take place, yet six months later, we were still throttling forward at full speed. The real estate market was still experiencing unprecedented growth. Multiple offers were the norm. A few months later now, we are, inarguably, seeing the market slow. At first, home prices didn’t fall. We just started seeing homes stay on the market a few days longer before receiving an offer. Part of this is normal for the time of year. When school starts in Utah, everything else is put on hold. Yet, there are other indicators as well.
Many sellers have become disenamored that their homes are not selling above list price, as their neighbors did a year earlier. As a result, the unwillingness to lower their prices, have slowed sales.
Another reason for the slowdown, besides the fact that average incomes haven’t been able to keep up with housing prices, is the threat of rising interest rates. Again, this too has not come to fruition. The interest rate did go up, for a minute, but the Fed has continued to lower it again, expecting the housing market to rebound.
The jury is still out among economists, regarding the potential “recession” as related to housing. Some say prices will flatten, but not likely fall, others say they will fall marginally. However, there are not predictions or indicators that we will face a “crash.”
In fact, even if there is a true recession, historically, a recession that follows a previous bad one, are barely noticeable. Prior to the hit in 2007, for example, the previous one was in 2001 and it lasted eight months. Few people knew we were in one until it was over.
Investors and owner occupants alike who are waiting for the crash, can take off their helmets. There are still not enough homes to satisfy the number of buyers. In Utah, with the growth we are currently experiencing as well as the growth that is projected over the next several years, we are not likely to be giving houses away anytime soon.
However, since the anticipation of a recession could exacerbate the housing shortage, putting sellers on hold to list their properties, we could shoot ourselves right in the proverbial foot. So just grab a lemonade, have a seat, and chillax. Every little thing is gonna be alright.