Location should be the determing factor in where you purchase, if it is a decling neighborhood, then chances are you will not make any money.
A good Realtor should be able to comp the neighborhood and determine that situation for you.
If I just blurted out that you should purchase a home and not know your entire financial situation, I might be setting you up for a future loss.
I suggest buy... get a well priced foreclosure and you can't go wrong! You'll probably pay just as much or more in rent - so it doesn't hurt to have an asset to sell in 5 years. I expect the Michigan market will be better by then. Make sure your Realtor does lots of background work on whatever property you choose to make sure you have a sound investment.