Your question is, "Why are the houses so cheap....."
You do not ask "....low priced..' or 'inexpensive.'
You choose the word...CHEAP!
if you choose you can be in denial of the definition of the word CHEAP.
That is OK. DENIAL is a common currency today.
Do you know most folks with Appalachia origins have an accent?
Are you familiar with the "Hatfields and McCoys?"
Is it possible there exists a stereotype of Kentucky other that what surrounds Lexington?
Is it possible the History Channels program "Appalachia Bush People" or "Outlaw Moonshiners" influences more people than the Kentucky Derby or the Blue Devils?
I am confident you believe those who sing My Old Kentucky Home with tears in their eyes do not have an accent, but everyone else does. Sometimes we can't see the forest for the trees.
Homes are less expensive in Paducah because it is Paducah.
Some prefer conch shells and tropical breezes.
Your question, properly stated, must read, "Why are homes less expensive in Paducah compared to Key West?" Now we've got something to work with.