I will disagree with you slightly here, respectfully so, of course.
My fiance and I live in Phoenix, AZ, where we were able to secure a new construction home for about $120k. It is in South Phoenix, and, for all my fellow Arizonans out there, they know it's not the best part of town. But it's promising, and now we're looking at it's appraised value hitting $200k this year.
Here, the way the market is right now, people looking for your version of a starter home are outbid at least $10k higher than the starting price by investors who pay cash. The only option for most people is new construction because the builders don't allow investors to purchase new construction.
Any investor paying over retail, is some idiot from Cali or some other inflated market being stupid, which I do know is happening in AZ etc..... Trust me, be patient, you will find a deal in EVERY SINGLE MARKET OUT THERE! The important thing is to have MONEY and be patient.