By Block houses, I am assuming you are referring to homes made with a cinderblock material. I think the reason that most buyers turn their noses up is purely cosmetic. In general they don't look real attractive with the large grout lines, and the large flat blocks. However, it is not that hard to make them the darling of the neighborhood.
I have a client who turned her "ugly duckling" into the cutest house and has people knock on her door weekly asking her if she wants to sell. What did she do? She covered the block with a stucco or stocco like product. The contractors covered the grout lines and the entire house with an even coat. Then she had it painted a cute color. She did the house with a Spanish influence and added rustic shutters, some cute post on the porch... and voila ... she had a House and Garden contender.
I don't think the objections to block houses are the "construction" method as much as the look. Get some magazines and books and try and find some curb appeal ideas that with distract from the "block" and make the house a "buy".