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40 WHAT ARE THE TOP AND BOTTOM CBSAs? On February 28, Pro Teck 's Valuation Service Home Value Forecast analyzed the upside and downside of recovering housing markets such as Nashville, Tennessee, where the population and employment growth has helped and hindered a return to prosperity. At the time of the report, Nashville had remained at the top of Pro Teck 's core-based statistical areas (CBSAs) for two months and counting, had a stable economy and an upward trend in employment opportunities, and population growth at a 9.2 percent increase from 2010 to 2015. is led to a rapid increase in housing cost per square foot, which spiked to 50 percent since before the housing crisis. "Unlike similar metros across the country, Nashville didn't experience drastic price reductions postcrash, only losing 6 percent of value before the last four years of impressive appreciation," said Tom O'Grady, CEO of Pro Teck. "is combination of population growth and job creation has insulated Nashville from the downturn; limited inventory also played a part." Although the growth in Nashville should be looked at as a positive from a recovery standpoint, there was a decline in the housing starts following the crisis. From 2003 to 2006, Nashville averaged 15,000 building permits a year, and by 2014, the housing market in Nashville came to a halt with a shortage of 53,000 new homes, causing a backup for almost four years. "Looking at months of remaining inventory (MRI) by price show there are not many options for those looking to purchase a home for less than $300,000," said O'Grady. "With investors paying a premium for land near the city, they are building bigger and more luxurious homes to make a profit, thus leaving a shortage of affordable housing." Every month, the Home Value Forecast uses a statistic of leading real estate market based on single-family homes as an indicator to rank the strongest to the weakest. e top CBSAs in February include Bellingham, Washington; Colorado, Springs, Colorado; Greeley, Colorado; and Nashville, Tennessee, to name a few. e bottom consists of El Paso, Texas; Miami, Florida; Huntsville, Alabama; and Albuquerque, New Mexico. "Recovery in these markets is still being impacted by foreclosure sales and large REO discounts," said O'Grady. "With the current lack of inventory, the REO discount should shrink, helping these markets to recover." DISTRESSED, CASH SALES NEAR PRECRISIS NUMBERS Distressed sales fell yet again, reaching their lowest numbers since September 2007, according to a CoreLogic report released February 27. As a share of total home sales, distressed sales made up just 7.5 percent in November 2016—the lowest share in nearly a decade and almost 25 percent lower than their peak in January 2009. Before the crisis, the average share of distressed sales was approximately 2 percent. According to CoreLogic Principal Economist Molly Boesel, "If the current year-over- year decrease in the distressed sales share continues, it will reach that 'normal' 2-percent mark by the end of 2017." Forty-two states saw lower distressed sales in November 2016 than one year prior. Only North Dakota and the District of Columbia are within one percentage point of their precrisis levels. e largest shares of distressed sales were seen in Maryland (18.4 percent), Connecticut (18.2 percent), New Jersey (15.8 percent), Illinois (14.3 percent), and Michigan (14 percent). Overall, REO sales made up 4.9 percent of all distressed sales, while short sales made up 2.6 percent. In total, cash sales made up 32.4 percent of all sales in November 2016—down 4.5 percentage points since November 2015 and 14.2 percent since their peak in January 2011. REOs accounted for the largest cash sales share (60.2 percent), followed by resales (32.3 percent), short sales (31.9 percent), and new homes (15.5 percent). e largest number of cash sales occurred in New York (47.4 percent), Alabama (47.3 percent), Michigan (44.1 percent), Florida (42.4 percent), and Indiana (41 percent). Cash sales are quickly approaching their precrisis numbers. "Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent," Boesel reported. "If the cash sales share continues to fall at the same rate it did in November 2016, the share should hit 25 percent by mid-2017."

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