The point is that the house isn't worth even the back taxes on it. That is hard to imagine from a west coast perspective. Even after the bust in 2009, I don't think it got that extreme in too many places.
I was having a look at another cheap house from around the area. Just check out the graph: http://www.zillow.com/homedetails/23-Barrett-Ave-Jamestown-N...
I'll agree though - the main thrust that Jamestown, NY RE is surprisingly low compared to elsewhere is an interesting one.