Distressed sales—real estate-owned and short sales—accounted for 13.5% of total home sales nationally in February 2015, a 3 percentage point drop from February 2014 and a 0.8 percentage point decrease from January 2015, according to the latest report from CoreLogic.

Distressed sales shares typically decrease month over month in February due to seasonal factors. The February 2015 distressed sales share was the lowest for any February since 2008.

Within the distressed category, REO sales accounted for 9.7% of total home sales in February and short sales made up 3.8%.

At its peak, distressed sales totaled 32.4% of all sales in January 2009, with REO sales representing 27.9% of that share.

The ongoing shift away from REO sales is a driver of improving home prices, as bank-owned properties typically sell at a larger discount than short sales. There will always be some amount of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2%.

If the current year-over-year decrease in distressed sales share is maintained, the distressed sales share would reach that "normal" 2% mark in mid-2017.

Michigan had the largest share of distressed sales of any state at 22.6%1 in February 2015, followed by Florida (22.2%), Illinois (20.4%), Maryland (19.1%)and Connecticut (19%). Nevada had an 8.4%age point drop in its distressed sales share from a year earlier, the largest decline of any state. California had the largest improvement of any state from its peak distressed sales share, falling 57.3 percentage points from its January 2009 peak of 67.5%. While some states stand out as having high distressed sales shares, very few states are even close to their pre-crisis distressed sales share. North Dakota, the District of Columbia and Hawaii are the only states within one percentage point of their respective pre-crisis distressed sales shares.

Of the largest 25 Core Based Statistical Areas based on loan count, Miami-Miami Beach-Kendall had the largest share of distressed sales at 24.4%, followed by Orlando-Kissimmee-Sanford (24.4%), Tampa-St. Petersburg-Clearwater (23.8%), Chicago-Naperville-Arlington Heights (23.1%) and Las Vegas-Henderson-Paradise (19.1%).

Atlanta-Sandy Springs-Roswell had the largest year-over-year drop in its distressed share, falling by 9.2 percentage points from 25.4% in February 2014 to 16.2% in February 2015. The CBSA with the largest overall improvement in its distressed sales share from its peak value was Riverside-San Bernardino-Ontario, Calif. At its peak in February 2009, distressed sales made up 76.3% of all sales in Riverside compared to its current share of 13.2%.