The housing market in New Jersey looks like it’s starting to recover.

Pat O’Keefe, Director of Economic Research at JH Cohn, says new data shows home prices on the national level were up almost 7 percent during the second quarter of the year, and “prices here in New Jersey rose for the first time in 5 years, going all the way back to the first quarter of 2007.”

He say here in Jersey, we were up only about 1 percent.

“That is a positive and it’s a further validation of the observation that housing in New Jersey , housing nationally, has finally turned the corner…We’re taking baby steps, and we’re not accelerating rapidly from the low levels to which we’ve fallen in Jersey. Housing prices are at a level equivalent to the second quarter of 2003…But the pattern that we see…re-sales and new home sales is a market that has stabilized and is making slow but sure progress.”

O’Keefe adds the market is digesting the substantial inventory of foreclosures and other distressed properties that had accumulated during the downturn, and if we didn’t have that substantial overhang of distressed sales, prices would be picking up more rapidly than is the case.

“The good news here is that we’ve seen some marginal improvement in prices, despite the fact that that substantial inventory of distressed properties remains in front of us…Over the next year, what we’ll see is an uneven, but upwardly sloped improvement in housing sales and housing prices here in New Jersey…It’s going to start gradually, as it already has, proceed somewhat fitfully for the remainder of this year, but next we’ll see an incremental improvement in housing sales here in New Jersey.”