I know the house is dated and needs work but won’t a young first time homebuyer buy it and fix it up little by little?

Probably not. The modern buyer understands that it’s easier and more cost effective to purchase a house that is updated and pay it off over 30 years.  Dated houses cost a little less but require tens of thousands of dollars to update.  Not to mention the inconvenience of living in a construction site.  As a result these older dated homes sit on the market for long periods of time.