Add water to a shallow bowl, sprinkle gelatin evenly over water to hydrate, set aside.
In a medium saucepan over medium low heat, warm milk and sugar, whisking occasionally until sugar is dissolved and reaches a temperature of 140°F.
Remove pan from heat and whisk in gelatin mixture, making sure to remove all the gelatin from the bowl. Return pan to heat and cook until gelatin is dissolved, 3-4 minutes, whisking constantly.
Remove pan from heat and whisk in cream, vanilla extract, and salt until thoroughly combined.
Pour mixture into a 4-cup measuring cup or a container with a spout. Divide the mixture evenly between 6- 4-ounce ramekins or small glasses. Cover and refrigerate for at least 6 hours or overnight.
To make the raspberry sauce, add raspberries to a medium sized saucepan and place over medium heat. While berries heat, mash with a potato masher or a whisk. Let berries heat for about 5 minutes, or until they have released their juices.
Strain raspberries through a mesh strainer to remove seeds, and rinse pan to remove any seeds. Return the strained raspberry juice to the pan along with the ⅓ cup of sugar, whisk until combined.
Bring mixture to a boil over medium-high heat, once mixture begins to boil, reduce to medium and cook mixture until reduce slightly and becomes thick, about 10 minutes.
Remove pan from heat and pour mixture into a bowl, allow to cool for 10-15 minutes, cover and refrigerate until ready to use, should make 1 to 1 ½ cups of sauce.
To invert panna cotta onto a serving plate, run a thin knife along the top edge of the ramekin to loosen, only loosening about ⅛ inch deep. Place ramekin in a bowl filled with warm water measuring about ¾ up the side of the ramekin. Allow ramekin to sit in water for about 1-2minutes.
Remove ramekin from water, dry with a towel to remove excess water, place plate inverted centered on the top of the ramekin, hold plate tightly to the ramekin quickly turn. Gently tap ramekin to encourage the panna cotta to release. Gently lift the ramekin leaving the formed panna cotta on the plate. Garnish with 2-3 tablespoons of raspberry sauce.