It was a lackluster 2011 for home builders in New Jersey, but modest improvement is expected this year. With reasonable prices for land, many developers are starting to invest. "They're looking at properties and starting to get ready for the next upswing," said Dominic Paragano, President of the New Jersey Builders Association.

But, there is a new normal. "I think home buyers are looking for all the niceties you can put in a house, they want to know that all the bells and whistles are in place, but they aren't looking for the palatial estate homes that we've seen in years past," said Paragano. "Developers are building smaller, more efficient homes."

"I think the housing market will be up modestly in 2012," said Patrick O'Keefe, Economic Research Director at J.H. Cohn in Roseland. "The uptick should come in the second half of the year after the housing market begins to clear its inventory of homes under foreclosure. Plus, people are feeling a bit more confident about their jobs and their prospects for work and households are increasing."

Price will be another factor. "With reasonably priced land, builders will be able to build cost effective, competitively priced homes," said Paragano. "We're cautiously optimistic about 2012, but we still have to be careful because it's still a fragile economy."

"Builders will be putting up homes and keeping a close eye on their inventory," said O'Keefe. "They won't be building too far ahead of sales."