You hit the nail right on the head. That $700,000 home will only be worth $700,000 as long as someone is willing to pay that much money for it. What people don't understand is that Americans are not replacing themselves adequately enough to make the economy grow naturally, so there is a real possibility that the guy who buys that house for $700,000 in 25 years is now a 10-12 year-old kid wading across the Rio Grande with his parents.
Because I've got news for you -- if that kid ain't around in 25 years to pay $700,000 for that house, then nobody will.