They are pressboard covered in a cement coating and the ends are ceceptible to moisture if not primed during installation and painted and maintained.  

The ceiling is falling in in one spot and moisture seems to have create a mold problem, locally around the leak.

Similarly, touches like entryway rugs to collect some dirt/moisture can add some charm while helping keep floors clean. 

You do need a razor blade to get the thick paint off but it is a breeze to do with a little moisture.

I know where the moisture is coming from and how much it will be to fix that, but I'm trying to put an offer in on this tomorrow and I can't get anyone to come out for a few days.I'm curious if anyone has had to deal with before and how they took care of it.

. - thanks for the link, it was very educational although I didn't see a frame wall/frame clad I still learned a few things... the siding is the original lapped board @Josh James - this is Oklahoma, similar climate... the reason the question has come up in my mind is there was some additional interior moisture that likely came from an older siding patch where the caulk is gone, plan is to, as you said, caulk and paint but was curious about the barrier...

If so the REIN contract requires a clean moisture termite inspection, so you have to address to get one eventually.  

I have just finished putting down 3 pallets of laminate in some of my rehabs, the most important things to look for are length of tongue (the short tongues have a tendancy to want to snap, plus they can move eisier), resistance to moisture, and of course looks.

Do you know where the moisture is coming from?

That helps block the moisture.