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76 NATIONAL SNAPSHOT Regional Bucking the Trend: Sales Stay Strong in NE, Midwest By Molly Boesel, Principal Economist Cash sales are on the decline, and if the recent downtick con- tinues, it could mean pre-crisis levels aren't far away. In September 2016, cash sales accounted for 31.7 percent of total home sales, down 1.3 percentage points year over year from September 2015. e cash sales share peaked in January 2011, when cash transactions accounted for 46.6 percent of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. If the cash sales share continues to fall at the same rate it did in September 2016, the share should hit 25 percent by mid-2019. Figure 1 shows the historical trend in cash sales share by sale type. REO sales had the largest cash sales share in September 2016 at 59.4 percent. Resales had the next highest cash sales share at 31.7 percent, followed by short sales at 31.2 percent and newly constructed homes at 15.5 percent. While the percentage of REO sales within the all-cash category remained high, REO transactions have declined since peaking in January 2011. Figure 2 shows the distressed sales share of total home sales in September 2016, of which REO sales made up 4.7 percent and short sales made up 2.7 percent. e distressed sales share of 7.3 percent in September 2016 was the lowest distressed sales share for any month since September 2007. At its peak in January 2009, distressed sales totaled 32.4 percent of all sales with REO sales representing 27.9 percent of that share. e pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in the distressed sales share continues, it will reach that "normal" 2-percent mark in mid-2018. All but nine states recorded lower distressed sales shares in September 2016 compared with a year earlier. Maryland had the largest share of distressed sales of any state at 18.9 percent in Sep- tember 2016, followed by Connecticut (18.4 percent), Michigan (17.6 percent), New Jersey (15.9 percent), and Illinois (15.1 percent). North Dakota had the smallest distressed sales share at 2.7 percent. 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 levels (each within one percentage point). Figure 3 shows the cash sales share by state for September 2016. Alabama had the largest cash sales share of any state at 47.6 percent, followed by West Virginia (45.8 percent), New York (45.3 percent), Florida (41.6 percent), and Indiana (40.9 percent). It seems we may be seeing pre-crisis levels for a number of stats in the near future, as both cash sales and distressed sales are declin- ing nationally. ere is room for optimism though, as REOs and other cash sales appear to be holding strong in the Northeast, South, and Midwest regions. 1. e distressed sales share for states was calculated using sales from the past 12 months. 2. Adequate data was not available for New Jersey, South Dakota and Vermont, and as such, cash sales shares are not reported for these states.