There is social Housing in Blackrock aswell, I don't think a particular area is exempt form socilal Housing, Blackrock is a nice area, but the houses there are alot more expensive. I do agree with you that Location is extremely important as the day you buy is the day you sell. But in a downturning market and the onset of mortgage interest hikes, it is very difficult for first time buyers to buy in good areas in Dundalk.
From what I have seen, there are alot of houses for sale in the following areas, which don't seem to be selling.
Saltown
Ashbrook
Woodbury Gardens
Glenwood
Another thing which I have noticed is that houses are going Sale Agreed and then going back on the market 2 weeks later, this has happened about 10 times that I have noticed over the past Month.
Lis na dara would be a good area, anything on the Carrick road and Mount Avenue sold well, but that may change with the amount of houses that Lis na dara will produce, also ther will be a number od houses in that development that will be considered social Housing.
Personally I think at this stage I might give the house hunting a rest, as the housing market appears to be stagnent.