I know that this post is rather time sensitive, so I hope that I will be able to delete it when the economic downturn is over...if ever.
I was just reading an article on Yahoo about houses under $5000.00. Most of those listed were in Detroit. I know that it is always a gamble buying in a city that is having the issues that Detroit is experiencing, but it seems to me that if there are people who do not depend on services too heavily, and just need a place to live, such as a retired couple etc.. It would be worthwhile to buy in Detroit or some similar area. If I paid $1500.00 for a house, I would be able to retire today.
I would also look in my home area of Aroostook County in Maine. It is very remote from the big cities and cold in the winter, but it is getting warmer...it is on the edge of bigger civilization in Canada( a few hours from Quebec City and a few more from Montreal. New Brunswick and Nova Scotia are very close and have many French speaking as well as English speaking areas)...the houses and land are cheap. The Summers are absolutely delightful! They are temperate. There are tons of lakes and streams. The area may not be a cultural hotspot, but the people are warm and friendly, and there are services and hospitals etc. There is a big Snowmobile culture there, and plenty of fishing and hunting in season.
My sister and her husband(born in the 1930s and 1940) live nearby, and they weather the winters with ease, burning wood in their woodstove, reading all winter and watching the birds and wildlife from their armchairs by the French doors. There are plenty of black flies and mosquitoes to be sure...in the wooded areas. But, in the towns, they are not a problem, and I have more problems with them in Massachusetts than I ever had there. Mid-summer is relatively bug free.
There are plenty of rural areas all over the country with similar attributes, that would be excellent places to retire quietly.
Contact my old classmate, John Randall, in Houlton, Maine to inquire about local properties or take a look at Zillow.com for properties anywhere. I think he is at First Choice Real Estate. A very nice guy. Tell him I sent you!!!