I think I may know this property.  If its the same one then – it is quite close to where we live and is also on a main road across from shops, the local high school and the pub.  You are right in thinking that everyone knows about it.  This is especially so because it is on a main road that gets traffic from several surronding suburbs and is quite distinctive in appearance.  I'm sure the local high school kids and pub fraternity will keep the story alive.  The block of flats next door is where the muderer lived and I think that any tenants would find out the details pretty quickly.  I don't think that any locals would want to buy it or live there. It's a case of location location working in reverse. Its been on the market for ages.  I feel sorry for the victims parents, who apparently own it (although local rumour was that it had been sold – think this may have even been reported in the local paper.) 
I'm a complete newbie at this so there may be wiser heads out there who advise otherwise, but personally I'd avoid it.