updated 1/22/2008 5:14:54 PM ET 2008-01-22T22:14:54

When Eric Feichthaler became mayor three years ago, this town was booming. The city issued 800 permits that month to build single-family homes.

Cape Coral still has thousands of empty lots, but last month, it issued just nine permits.

A number of factors explain the downturn, and many of them are not unique to Florida. But it is becoming clear the Sunshine State is losing some of its luster.

Census figures show that in 2007, the number of people who moved to warm and sunny Florida from other states outnumbered those who left by just 35,301, down from 268,347 in 2005. It was just the second year since 1990, when the Census Bureau started keeping such records, that the state saw fewer than 50,000 net U.S. arrivals.

For many years, Florida was like a stateroom in a Marx Brothers movie: more and more people kept arriving, and hardly anyone left. During the 20th century, Florida's population boomed, with growth rates ranging from 20 percent to 80 percent per decade. Florida is now the fourth-largest state, with about 18.1 million people.

Cape Coral feels the drain
Experts blame the recent slowdown on a combination of circumstances: The national mortgage crisis and the bursting of the real estate bubble, hurricanes, Florida's steep insurance rates and property taxes, and rising unemployment.

The shift is felt most in places like Cape Coral, which went from barren southwestern Florida swampland to bustling bedroom community and one of the state's centers of a building and buying boom. But now there is a sea of unsold homes and undeveloped lots in this 115-square-mile city.

"It was very good before. It was like houses everywhere, buildings coming up everywhere and all of a sudden, everything stopped," said Elliot Aguilar, a 35-year-old electrician. Aguilar is married and a father to five children. He lost his permanent job and now is working in a lower-paying temporary position. "If this continues, we probably have to move to another state."

Town mayor Feichthaler said he is glad certain folks have left — "the people that came in three years ago in a gold-rush mentality" — even if that is causing some upheaval. The downturn, he said, is leading to more affordable housing and the departure of unlicensed contractors, shady title agents and other scam artists.

All of that, however, is of little comfort to those suffering from the downturn.

Foreclosures and relocations
Foreclosures in Lee County, of which Cape Coral and Fort Myers are a part, shot up more than fivefold last year, to 12,566, according to RealtyTrac, which records such data. The median price of single-family homes in the county fell to $239,300 in October from $322,000 two years earlier, according to the Florida Association of Realtors.

And unemployment in the Fort Myers metropolitan area has climbed to 5.4 percent, its highest level since 1994, in large part because roughly one in three people in Cape Coral work as real estate agents, title insurers, contractors or in some other job linked to a sagging housing market.

The slowdown is not just along the Gulf Coast. Across the state, people tired of hurricanes and high housing costs are reconsidering Florida.

Beth Mann, 27, lived in West Palm Beach until a year and a half ago, when her husband, Michael, was offered a teaching job in Georgia. He took it. The couple moved to Buford, Ga., with a higher salary earned than in Florida.

Their house is three times bigger. Their property taxes are 75 percent less. Their homeowner's insurance bill has been cut nearly in half.

"We're like, 'Why didn't we move sooner?' " she said. Eight other homes on the Manns' street are also occupied by former Floridians.

A recent Mason-Dixon poll found 43 percent of Floridians said their quality of life is declining and 37 percent believe the decline will continue in the next year. One in three said they would tell a friend or loved one not to move here; one in five said they are seriously considering a move.

Stanley Smith, who heads the Bureau of Economic and Business Research at the University of Florida, blamed hurricanes, taxes, insurance and housing prices.

Florida actually grew in 2007 by an estimated 193,735 people, including births and immigrants. That's a sizable number, just not as big as in years past.

"Florida isn't going to be losing population, but the increase will be smaller than it was in these boom years," Smith said.

Spirits remain high in downward trend
A 2005 report by Smith forecasts a decline in people moving to the state through 2030, but the overall population is still expected to increase by more than 10 percent in each of the next two decades.

In Cape Coral, where the population has more than doubled to about 150,000 since 1990, some welcome the downturn. Bob Janes, a Lee County commissioner whose district includes Cape Coral, said it may give officials time to improve mental health care, roads and other services.

But Feichthaler, who is challenging Janes for his commission seat, said the decrease in property values and the resulting plunge in tax revenue will mean the city must cut $6 million to $7 million to avoid tax increases. There have been municipal layoffs, and more are possible.

Many remain optimistic.

"People still want to follow the sun," Janes said. "And as soon as it gets cold up north, they think more and more about the sun."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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