Live in backward sleepy area somewhere in Spain (8)
I believe the answer is:
benidorm
'area somewhere in spain' is the definition.
I know nothing about this answer so I can't tell whether this works.
'live in backward sleepy' is the wordplay.
'live' becomes 'be' (synonyms).
'backward' says the letters should be written in reverse.
'sleepy' becomes 'dorm' (I can't explain this - if you can you should give a lot more credence to this answer).
'in' backwards is 'ni'.
'be'+'ni'+'dorm'='BENIDORM'
Can you help me to learn more?
(Other definitions for benidorm that I've seen before include "Costa Blanca resort" , "Spanish resort" , "Med resort" , "package holiday resort" .)