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Cash sales of new and existing homes have leveled off in recent months; however, as of September, they continued to represent more than half of real estate owned (REO) sales, according to CoreLogic's MarketPulse report for November.

Cash sales represented 37.4% of total home sales for September, down from 40.2% in September 2012, according to the report. Before the housing crisis, cash sales represented about 25% of all home sales.

Cash sales hit a peak in January 2011, when they represented 46.1% of all sales.

When breaking down cash sales by transaction type, REO cash sales rule the day. About 57.9% of all REO sales in September were cash sales, according to CoreLogic. This compares to about 37.3% for short sales, 36.9% for existing-home sales, and 17.2% for new-home sales.

Looking at cash sales on a state-by-state basis, New York led the way in September with 56% of all sales being cash. New York was followed by Florida at 54.4%, West Virginia, at 53.6%, Nevada at 53.2% and Alabama at 51.1%.

Looking at cash sales on a city-by-city basis, Dayton, Ohio, had the highest percentage of cash sales for September, at 74.9% of total sales, followed by the Miami-Miami Beach-Kendall, Fla., area at 62.2%; the West Palm Beach-Boca Raton-Boynton Beach, Fla., area at 60.7%; the Las Vegas-Paradise, Nev., area at 60%; and the Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla., area at 59.8%.

Although cash sales by investors, wealthy individuals and downsizing retirees have done much to drive the housing recovery during the past several years, many industry experts feel that it is an unsustainable trend, as these three population segments simply aren't large enough to sustain the market in the long run. Conversely, if cash sales continue to propel the market, some analysts fear that it will have a negative effect on the recovery, as home prices will rise artificially to unaffordable levels, thus causing those consumers who must borrow to be priced out of the market.

To download a copy of CoreLogic's MarketPulse report, click here.

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