New Jersey home sales are trending in the right direction. According to Jeffrey Otteau, this "trend began all the way back in May when home sales rose for the first time in more than a year following the expiration of the home buyer tax credits in April 2010."

Recent data shows "the trend is not weakening and is therefore likely to continue into 2012." Since consumer confidence has improved and affordability (ratio of incomes to prices) remains over 100% "we may be seeing the start of a sustainable housing recovery - without tax credits - with staying power."

New Jersey, which has lagged the nation in job creation, has gained jobs in 8 of the 10 months prior to December 2011.

Mortgage rates have been very low (below 4%) and will remain. In New Jersey, home sales were higher in six of the last seven months (below). Buyers seem primed for 2012.

Zooming to the local scene, my data on Hunterdon County home sales shows the impact of the April 2010 tax incentive. Except for those few months, 2011 home sales ran above the year before and ended on a slightly higher note than most recent years.

Given the trend in New Jersey as a whole, the local homes market could rival the better years seen in the graph above. Now, what about home sale prices?

While the pace of home sales will probably quicken significantly this spring, a still too-high inventory means buyers have too many choices. Typically home prices don't get bid up until the inventory index (# sold last month/# homes for sale) drops well below 8 months of supply.

Until then, competitive pricing, staging to sell, aggressive marketing remain three essential keys to selling well in the very competitive Hunterdon homes market.