Not only did Florida’s population stop growing last year, it also shrunk for the first time since World War II, when the soldiers who were being trained in the state left.

According to estimates by the University of Florida’s Bureau of Economic and Business Research, the state lost more than 58,000 people between April of 2008 and April 2009.

While those numbers are impressive, most economists and home builders think it’s more indicative of the depth of the national recession rather than a statement about the desirability of the state as a place to live. The population loss is temporary, they speculate. The fundamentals of Florida, with its balmy weather, beaches, and no state income tax should continue to draw new residents.

Stan Smith, director of the University of Florida bureau, said the state will recover as the economy does. The bureau has been tasked with counting the state’s population yearly since 1972 to help determine how to divvy up the state’s revenues.

Smith credited the fall in population to the loss of more than 600,000 jobs in the state over the past few years causing people to leave to seek opportunities elsewhere. “Secondly, I think it was the housing market meltdown,” he said. “It made it difficult for people who wanted to move to Florida to sell their homes, so they put off a move to a later date or canceled completely. This would affect retirees.”

“I think growth will be pretty slow this year and probably pick up in 2010," he said. "As the economy recovers, I would expect growth to increase, though I don’t see it reaching the level it was."

All in all, Smith still thinks the recent fall in population might come close to balancing out the high-growth years of the early part of this decade. That might leave the state's population with an overall increase of 3 million people between 2000 and 2010, which is close to the same number of people who have moved to the state every decade since 1970, he said.

Since the population count is a lagging indicator, things might already be improving in the Sunshine State. Some signs seem to suggest this. For example, sales of existing homes in Florida increased 37% in July over the year before, in an acceleration of June’s 28% year-over-year improvement and May’s 16% rise, according to Raymond James Research.

House prices, too, have fallen. This makes Florida more affordable for potential new residents than it might have been in the recent past. And, with a huge stack of unsold homes on the market, it appears lower prices will be around for a while, said Smith.

But these lower housing (and land) prices are doing more than attracting home buyers; they are also drawing home builders looking for bargains in the state. NVR’s Ryan Homes has recently started building homes in Florida.

Builders who have operated in Florida during the recession say they have faith in the state's housing market, despite the challenges they have encountered during the deep downturn. “We are staying,” said Ken Campbell, CEO of Standard Pacific Homes. “We actually bid on some land in Florida last week. We are actually doing quite well in some places like Tampa. I think Florida will be about a year behind (California), maybe a bit more."

Suresh K. Gupta, CEO of Orlando-based Park Square Homes, attributes some of the population loss to the high price increases for homes in Florida two or three years ago. “That was when people thought Florida was no longer affordable,” Gupta said. “We are seeing the aftermath of that.”

Edie Ousley, spokeswoman for the Florida Association of Home Builders, agrees. Some of the perception that Florida was becoming less affordable are true, she noted, citing the fact that property taxes in the state rose nearly 80% between 2001 and 2006, clearly outpacing inflation and population growth.

But with prices back to where they were in 2003, Park Square's Gupta thinks the buyers will return. “You can buy a house now for less than $200,000.”

He expects the job market to turn around too, particularly in Orlando, where one part of town is slated to be gain 30,000 new jobs in medical enterprises. “I think we are at the bottom,” Gupta said. “There are good economic signs; some indicate that it is turning around.”

According to Ousley, the state’s legislature has made changes that could improve the economy and the state’s builders. “Even though we have received some disturbing news with the population decrease, lawmakers have put meaningful reforms in place that will help the housing industry rebound and will ultimately attract more people to move to Florida," she said. For example, local Florida governments must now prove the necessity of improvements that would be funded by builders' impact fees. The state is also streamlining growth management rules to make it easier to develop in urban areas and therefore reduce sprawl.

That's good news for builders as they wait for the recovery.

“We are hearing our builders’ confidence level has increased,” Ousley said. “We are hearing positive stories. We are hearing about more traffic in model homes. We are hearing success stories. We feel we are on the rebound. Florida offers so much.”

Teresa Burney is a senior editor at BUILDER and BIG BUILDER magazines.

Learn more about markets featured in this article: Orlando, FL.