Click on graph for larger image in graph gallery. This graph shows the percent of REO, short sales and conventional sales. There is a seasonal pattern for conventional sales (strong in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales increases every winter. The tax credits might have also boosted conventional sales in 2009 and early 2010.
Note: Prior to June 2009, it is unclear if short sales were included as REO or as "conventional" - or some of both.
In February 2011, 71.2% of all resales (single family homes and condos) were distressed sales. This is the 2nd highest level of distressed sales since Sacramento started breaking out short sales - last month was the highest. And this is the highest level of REO since July 2009.
Also one-third of all homes were sold for cash, up from 31.3% last month.
A high level of distressed sales suggests falling prices, and this data from Sacramento suggests further price declines in February. The CoreLogic House Price index hit a new post-bubble low in January, and my guess is the Case-Shiller index will fall to a post-bubble low when the January data is released on March 29th.