RealtyTrac, the leading online marketplace for foreclosure properties, released its U.S. Foreclosure Market Report today for November 2011.

In New Jersey, foreclosures dropped 78 percent compared to a year ago and seven percent compared to October 2011.

However, one should not develop a bright economic outlook due to the latest numbers, according to economic analyst Patrick O’Keefe of J.H. Cohn in Roseland.

“Over the last year, the number of foreclosures had been declining, but doing so for administrative, rather than economic, reasons,” said O’Keefe.

He explained there were several administrative and legal issues cropping up lately that have slowed the pace of homes going through the foreclosure process. As those issues are handled, according to O’Keefe, the pipeline would become “unclogged.”

“In the first six months of 2012, certainly here in New Jersey, we will see a sharp uptick in the amount of foreclosure activity,” predicted O’Keefe.

He continued, “In terms of the human impact, that means more problems and more pain down the road.”

The dark housing market days for New Jersey, however, would end in the second half of next year.

“As that backlog that’s accumulated in the pipeline finally works its way through, we will begin to see a stabilization of the housing market,” explained O’Keefe. He predicted New Jersey will see a more normal housing market than it’s seen in the last four years.

O’Keefe noted it is deceptive to focus on month-to-month movement of foreclosure numbers.