This failure to accommodate young people in the realty market has happened because nationwide, most homes have become larger and more expensive. Consequently, they are too pricey for the average first time buyer.

A spokesman for a local builders association told the St. Petersburg Times that builders will still be building over-sized homes but there will also be an increase in smaller houses being built. This change in strategy is not seen as a fad by builders; it is simply sound economics as smaller homes are in short supply.

Building smaller homes in the Florida area could also be one way of keeping the younger generation active there. There have been extensive studies involving the affordability of house prices for young people. One recent study was carried out in Boston, Massachusetts. This is an area known for its lack of moderately priced housing.

Boston is the third most expensive property market in the nation and according to the 'Boston Globe' newspaper, young people are moving away in droves because of the house prices. This is costing Massachusetts the 'human capital' needed for future growth and economic expansion. This type of situation could easily be replicated in Florida because it is such a popular retirement area; approximately 17% of the population is over 55.

This youthful exodus has been recognized and hotly debated in Boston. Part of the blame has been laid at the local government's feet with their zone rulings favoring large residential lots. A study proved that homes built from 1998 to 2002 used an average of 1.3 acres per lot.

With the cost of a building lot in Boston quoted at around $300,000 and a house costing around $250,000, young people have no chance of owning a home.

Perhaps learning from Boston's mistakes, the news in Florida is that the government is trying to encourage more first time buyers. This will expand the younger segment of Florida society and consequently will also be likely to increase the permanent population.

The first time buyer program is designed to help those people who may have only a modest income. (There is a ceiling on the monthly salary.) Income limits are not rigid, but determined by the number of individuals living in the house.

The help that the state of Florida is offering is very worthwhile to look into if you are a first time buyer. Help can come in the form of assistance with the down payment, with the closing costs and in the provision of low, fixed rate mortgages.

There are several requirements to be met in order to qualify, including established credit worthiness and not having owned a home in the last three years. The program details can be found on the web listed as Florida's First Time Buyer Program, or you can ask your real estate agent to help you sort out the details.

Posted by Keith Sippel on December 13, 2008 at 12:00 AM

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