Where can you find cheap homes for sale? Add "that are also in a nice town" and that was the question we were trying to answer when my wife and I hit the road in 2002. Leaving Michigan early in April, we checked out towns from New Mexico and Arizona to California and Washington State, arriving in Montana in late May. It was a Sunday morning when we pulled into the town of Anaconda, with a real estate guide in hand that promised a beautiful little pink house for just $18,900.

Mount Haggin, at 10,700 feet, provides a great backdrop to the town, even dressing up white with snow or hail several times during July. In the high meadows above the tree line flowers are abundant by mid summer, and worth the strenuous hike/climb. Anaconda itself is at 5,280 feet - Montana's mile-high city, surrounded by mountains, lakes and streams.

First thing Monday morning we found a real estate agent and looked at several houses priced from $13,000 to $30,000 or so. The one in the guide was the one we wanted. It had two bedrooms, hardwood floors, a sunroom, and partially finished basement. Though it had been empty for a while, like many houses in town were, it was ready to live in, and the batteries in the garage door opener were still working.

We habitually try for less than the asking price, and our offer of $17,500 was accepted. The closing was set for June, and we headed back to Michigan to pack. We returned on a morning when the frost gave way to a 80-degree day (mountain weather is crazy that way). The home needed a few repairs, but when done we still had less than $20,000 total into it, and it was nice to be able to pay cash for the whole thing.

There are reasons why real estate is so cheap in some locales. In Anaconda it was because in 1980 the smelter closed without warning, eliminating most of the jobs in town. The prices of houses proceeded to drop for over 20 years from that point. In 2002 we didn't have our business, and I didn't like the two jobs I worked at while we lived there, so we sold the house five months later. We got $28,000 for it.

We returned for a visit in 2007. The town has been discovered, which is good news in many ways. With a ski resort fifteen miles away, a Jack Nicklaus golf course a few blocks off main street, Georgetown Lake and a beautiful setting in general, the population may be growing for the first time in many years. Houses are getting fixed up, there is a new brew pub and other new businesses.

And the bad news? You can no longer find a decent home for under $30,000 nor even under $60,000 in Anaconda. In fact, our little pink house would probably sell for $85,000 or more. Maybe we sold too soon...

One lesson here is that if you have a business that you can move with you (as we do now, and we live in a mountain town in Colorado), you can find cheap homes in great towns. Just find some beautiful little place that as had economic troubles for a while. These are great places to retire to as well, and $120,000 would still buy a very nice home in Anaconda and other such towns.