Distressed sales, which include real estate-owned properties and short sales, accounted for 9.4% of total home sales nationally in July 2015, down 2.1 percentage points from July 2014 and down 0.4 percentage points from June 2015, CoreLogic reports.

Within the distressed category, REO sales accounted for 6.1% and short sales made up 3.3% of total home sales in July 2015. The REO sales share was the lowest since September 2007 when it was 5.2%.

The short sales share fell below 4% in mid-2014 and has remained in the 3-4% range since then. At its peak in January 2009, distressed sales totaled 32.4% of all sales, with REO sales representing 27.9% of that share.

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The ongoing shift away from REO sales is a driver of improving home prices since bank-owned properties typically sell at a larger discount than short sales. There will always be some level 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 the distressed sales share continues, it would reach that "normal" 2% mark in mid-2019.

Florida had the largest share of distressed sales of any state at 20.7% in July 2015, followed by Maryland (20.6%), Michigan (20.2%), Connecticut (19.1%) and Illinois (18.9%). Nevada had a 6.4 percentage 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 58.6 percentage points from its January 2009 peak of 67.4%. While some states stand out as having high distressed sales shares, only North Dakota and the District of Columbia are close to their pre-crisis numbers (within one percentage point).

Of the 25 largest CBSAs based on loan count, Orlando-Kissimmee-Sanford, Fla. had the largest share of distressed sales at 23.8%, followed by Miami-Miami Beach-Kendall, Fla. (22.3%), Tampa-St. Petersburg-Clearwater, Fla. (22.3%), Chicago-Naperville-Arlington Heights, Ill. (21.7%) and Baltimore-Columbia-Towson, Md. (21%).

Warren-Troy-Farmington Hills, Mich. had the largest year-over-year drop in its distressed sales share, falling by 6.6 percentage points from 19.8% in July 2014 to 13.2% in July 2015. Riverside-San Bernardino-Ontario, Calif. had the largest overall improvement in its distressed sales share from its peak value, dropping from 76.3% in February 2009 to 11.7% in July 2015.

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