Las Vegas region November home sales fell nearly 23 percent below a year ago and dipped more than usual from October as investors and first-time buyers continued to dominate the market. The overall median sale price rose slightly from October but fell below the year-ago level for the second consecutive month, a real estate information service reported.

The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in October was $125,000, down 3.8 percent from $130,000 in both September and a year earlier. This year’s highest monthly median – $139,000 – was in June. Last month’s $125,000 median was the lowest for any month since April 1998, when it was also $125,000.

Understanding deflation psychology gives cashflow investors an edge. They can see the true value of a property when others are afraid to buy. If there are any enduring lessons the bubble blogs have taught readers, it is how to identify bubble psychology, and hopefully, how to identify the opposite: deflation psychology. Smart money is not buying in safe havens. Smart money is taking advantage of deflation psychology and obtaining undervalued cashflow properties in markets like Las Vegas.

As far as the Bay Area, I still worry that if the shadow inventory of foreclosures begins to hit, even “fringe” areas could see further declines. At the same time, if the Government has it’s way, those foreclosures may never come to market and perhaps opportunities will be missed.

If you’ve got money to invest in Bay Area real estate, this fall may be an excellent time for careful, very selective purchases.

The median home in Las Vegas — a 3 bedroom 2 bath detached property — can be owned for less than $500 per month.