in the middle of the night

The Wall street Journal reported today that existing-home sales rose 5.1% in February while the median price fell 15.5% year over year. Almost half (45%) of these sales were foreclosures and short sales (outstanding mortgage is greater than the sales price).

This is very good news – the market is working. Neither housing nor the larger economy will recover until we work off the growing inventory of foreclosed properties and under water mortgages.

There is no short-cut cure for a hang over, despite the railing of politicians and the whining of activists. Just as the liver requires many hours to eliminate alcohol from the body, the market will need months if not years to do its job of removing the housing junk from the economy.