Is there value in buying land/vacant lots/inhabitable houses in cities that are currently depressed? 

As this is a total gut rehab (porch, tilting staircase, HVAC, widening windows, plumbing, et al), everything needs to be done; it is inhabitable.   4-months is the estimate for completion. 

Specifically (for those who asked):-An agent stated a property could get conventional financing when he knew it had previously fallen out of contract because the buyer was denied conventional financing because the property was inhabitable.

Last Friday I had a fire in one of my condos.  10 out of the 12 units are inhabitable.  

Excluded from these requirements are sales of property with 1-4 dwelling units that has never been inhabited, sales exempt from real estate transfer fee, and sales by certain court-appointed fiduciaries (for example, personal representatives who have never occupied the Property).

And is inhabitable.

So when I listed both units on Craigslist I had somewhere between 30 to 40 showings and through the tenant screening company I used to perform the background check, the employment history, the credit check and so on, I was able to hand pick based on the evidence before me who I'd choose to inhabit the units.  

A-properties are the most recently constructed units, those that contain top amenities, require low maintenance, and are inhabited by young white-collar workers.

If you have a 1980's split level that just needs a $20k "refresh" but is otherwise totally inhabitable, a bank can lend on that assuming it will be a primary residence or you have enough money down to qualify for an investment loan (30% typically). 

I found a property in Johnson county, Texas (south of DFW) that has 2 inhabitable structures on 1 lot.