123,000 is still very cheap
Sure, maybe - but just because 123,000 is cheap doesn't mean it's OK to make your headline "You can buy a house from the government for $3,000" if the reality is that it's 40x as expensive and you don't actually get a house, you get a demolition project you have to complete in order to use the land.
Yes and for that I can get something much nicer in a non derelict area. Probably a much better plot too if I go rural.
Not if the thing is actually worth $3000
Did you look at the $3000 house? https://govauctions.app/auction/hud-home-420-e-dayton-st-fli...
It needs to be torn down and rebuilt. It's not a large plot. It doesn't seem to be in an attractive location. For all we know the water is undrinkable. I suspect its true value is negative.