TAMPA - Matt and Brenda Wehrly can't wait to move out of their cramped apartment and into their first home. The couple, expecting their second child, plan to close on a 3-bedroom home in Gibsonton this month.

The house sold in late 2005 for $222,800, and the Wehrlys are ecstatic about their contract to snatch it up for $97,000. Sweetening the pot even more, the couple will be eligible for an $8,000 federal tax credit.

"We wanted to buy something that would allow us to live on one income," said Brenda Wehrly, who plans to eventually stay at home with her children. "We wouldn't have been able to do that a few years ago."

Tampa Bay sales prices have plummeted more than 40 percent since the peak of the housing boom in 2006. That, coupled with federal tax incentives, is motivating buyers like the Wehrlys to get off the fence and purchase a home. This, real estate professionals say, has given a needed boost to Tampa Bay's struggling housing market.

That's exactly what the federal government had in mind in November when it extended tax credits and expanded the program to include some buyers who already own homes.

The Tampa area has a full measure of hard-to-pass-up deals, but closing on them is sometimes a challenge. Many of the best bargains are on distressed properties, and lenders are painfully slow to approve offers. With tax credits set to expire in April, some buyers won't be able to close in time and may not be interested in buying after the credit expires.

Experts worry about what will happen to the market then. But for now, all of this is keeping real estate agents busy and causing some interesting things to happen, said Ken Brownlee, an agent with Keller Williams Realty.

"If a house is under $100,000, you probably have a bidding war," said Brownlee, who said he hasn't seen that happen in years. "The prices are even starting to go up in some areas. I'm telling buyers who want to stay under $150,000 that they don't always have time to go home and sleep on it anymore."

Home sales in the Tampa-St. Petersburg-Clearwater area rose 28 percent in the fourth quarter of 2009, and the median sales price hit $138,800. That's down 42 percent since prices peaked at $239,600 in June 2006.

How steep are the price cuts on distressed homes? Here are some examples.

• A two-story, six-bedroom home, 3,092 square feet, in Riverview's Summerfield neighborhood is listed at $190,000. It originally sold for $402,700 in October 2005. It is not listed as a short sale.

• A three-bedroom, 2,076 square-foot home in New Tampa's Hunter's Green neighborhood recently sold for $180,000. It sold for $304,000 in March 2007. This was a short sale.

• A five-bedroom, 2,503 square-foot home in Land O' Lakes, is listed for $229,750. It's a bank-owned home and sold for $360,000 in October 2006.

As home sales rise, inventory of unsold homes is slowly dwindling, but there are still more homes for sale than there are buyers. Real estate agents estimate that as many as 60 percent of homes for sale are listed as short sales. That means the seller is trying to get their lender to accept less than the loan amount and write off the rest.

Lenders are doing this, but the process can take months, and many frustrated buyers are walking away.

"I've had two cases where the customer changed their mind by the time the lender approved the deal," said Mike Lindquist, an agent with Century 21 AMN Realty.

Such was the case with one buyer who wanted to purchase one of Lindquist's short sale listings for $159,000. The buyer offered full price, but the lender took too long to respond.

"The buyer got tired of waiting, and I ended up selling him a non-short sale home for less money," Lindquist said.

In that case, an investor had purchased the home for $112,000 last year, which was a bargain considering the home had originally sold for more than $200,000. The investor renovated it, putting in hardwood floors and new cabinets and expected to make a profit. Lindquist's buyer offered $150,000, and the investor accepted. But when the home appraised for $124,000, the investor reluctantly agreed to that price.

"It was a great deal," he said.

First-time homebuyers aren't the only ones taking advantage of discounts. Homeowners wanting to move up to a bigger house or downsize are in the market, too. Jon and Seiry Colley, of Keller Williams, said that while it's difficult for homeowners to sell their houses, they're making up for losses on the new houses they buy.

The short sales are bringing down prices, but they're also making regular sales more attractive to buyers who want to close quickly.

"The good properties are commanding a higher price," Jon Colley said.

Meanwhile, the Wehrlys are looking forward to getting into their new home, and they're thankful they found something they can afford.

"It's funny, my husband is most excited about the granite countertops, and I'm excited about the indoor laundry room – which has a window," Brenda Wehrly said. "But the mortgage payment is the best thing."

Here are some more examples of distressed properties and the prices they're fetching:

• Gibsonton

Three-bedroom, 2-bath home. 1,301 square feet.

Originally sold for $222,800 in November 2005. Under contract for $97,000

Short sale: No

• Riverview

Two-bedroom, two bath townhome. 1,254 square feet.

Originally sold for $191,800 in November 2006. Is listed for $70,000

Short sale: Yes

• New Tampa

A three-bedroom, three bath. 2,076 square foot

Originally sold for $304,000 in March 2007. Recently sold for $180,000.

Short sale: Yes

• Land O' Lakes

A five-bedroom, three bath home. 2,503 square feet.

Originally sold for $360,000 in October 2006. Listed for $229,750.

Short sale: No, bank-owned

Reporter Shannon Behnken can be reached at (813) 259-7804.