TAMPA - If you're looking to buy a home in the Tampa Bay area, the news gets better every month - prices are falling, and the number of homes for sale is growing.

The outlook isn't as rosy for sellers, though.

A June home sales report says there are more homes competing for buyers and fewer homes being sold. Some economists predict sellers may have to wait longer for a market rebound.

Expect prices to bottom out in late 2008, said Mike Larson, a real estate analyst with Weiss Research in Jupiter.

'If you want to sell your house, you have to be realistic and you have to be willing to drop your price,' Larson said.

The Florida Association of Realtors said Wednesday that sales of existing single-family homes in Tampa, St. Petersburg and Clearwater dropped 35 percent in June to 2,428 from 3,751 during the same month last year. The median sales price in June was $220,900, a 6 percent drop from $234,900 in June 2006.

Larson said prices are falling, but not enough to persuade some buyers to make a move.

'Prices still are not in line with people's incomes, and the creative financing that used to be available isn't now,' he said.

Fewer homes are selling, and competition is growing. In Hillsborough County, 21,468 homes are on the market, up from 16,725 this time last year, according to the Greater Tampa Association of Realtors.

Buyers are waiting on the sidelines, hoping prices will drop further, said Carlos Fuentes of the Realtors group. 'Our prices are correcting downward, but we haven't seen huge drops.'

The question on every buyer's mind: Is this the time to buy?

Forbes magazine and Moody's Economy.com lists Tampa as the hottest market in the nation to buy a home right now, in part because so many sellers may be willing to drop prices to compete.

Could the Bay area market get even better for buyers? Larson says yes.

'Buying is always a gamble,' he said. 'I think prices will drop more, and it will become even more of a buyers' market. But rates could go up.'

The Bay area's sales drop mirrored the rest of the state.

Florida saw 12,954 homes sell in June 2007, down 30 percent from 18,607 in June 2006. The median sales price dropped 5 percent to $243,200, compared with $256,200 in June 2006.

Other Florida cities to see large reductions in sales numbers included Miami with a 47 percent drop, Orlando with 43 percent, and Fort Lauderdale at 22 percent.

The area with the largest drop in prices was Melbourne-Titusville-Palm Bay, which saw a 15 percent decrease. Closer to home, prices in the Sarasota-Bradenton area fell 10 percent.

In the condominium market, the Tampa Bay area saw a 6 percent drop in sales, from 697 in June 2006 to 654 this June. Median sales prices dropped 3 percent to $165,900, compared with $171,900 during the same month last year.

The National Association of Realtors released figures Wednesday showing that existing home sales nationwide fell for a fourth straight month in June. Sales dropped by 3.8 percent to a seasonally adjusted annual rate of 5.75 million units, the slowest sales pace in 4 1/2 years.

The median price of an existing home nationwide edged up slightly to $230,300 in June, a 0.1 percent increase from the sales price a year ago. That was the first year-over-year price increase in 11 months, but analysts cautioned that it would take more time to determine whether the downward trend in prices has stabilized.

The sales declines covered all parts of the country. Sales were down 7.3 percent in the Northeast and 6.8 percent in the West. Sales fell 2.8 percent in the Midwest and 1.7 percent in the South.

HOME STARTS ALSO SLOW

Builders in Hillsborough, Pasco and Hernando counties started work on fewer homes in the second quarter of 2007 than the same quarter in 2006, Metrostudy, a Houston-based housing research firm, reported Wednesday. The three counties saw declines of 46.4 percent, 56.1 percent and 18.4 percent, respectively.

The Commerce Department is expected to release data today for new home sales nationwide.

Shannon Behnken

Information from The Associated Press was used in this report. Reporter Shannon Behnken can be reached at sbehnken@tampatrib.com or (813) 259-7804.