Why build when there are so many foreclosed houses on the market??

As I understand it, many of those foreclosed houses are not in very good nick.

Probably cheaper to build a new one, especially if you wanted to fit it with its own power generation, water source and sewage disposal, insulation and the like.

Tom, are you shooting for a LEED gold/platinum house (or the equivalent)? Super-insulated passive solar with PV, solar hot water, etc?

Definitely if you were going to buy that one, even if it went for a song, you'd need someplace to live while fixing it up ("fixing it up" possibly involving starting at the foundation). A Tiny House would do the trick there ... and in that situation, it seems highly unlikely that any local authority faced with that problem would object to someove parking a Tiny House in the yard while they were doing the fixer upper.