Average cost to build depends on your upgrades. I have found that it seems to come out somewhere between $150 - 200/square foot. Depending on the lot and what it takes to get the structure out of the ground and the utilities available. If you would like further information or the contact information for a few reputable builders please let me know.
Foreclosures might be the way to go: http://prescottreos.com
Good question. I have builders that are buying resale homes right now. If it is wiser for contractors to buy resale homes, than it is probably wiser for you.
If you are looking here is a login free website that you can use http://www.theprescottmls.com
Sorry builders, a definitive yes, it is cheaper to buy a pre-existing home than to build. That is why you don't see many speculation homes on the market.
Good luck and give email me if you would like some more information