Great verse, but needs to align with the rest of the Bible. Jesus was quite clear when he said that the cut off for heavenly life is John the Baptist, any believer before him is destined to earhly life, any believer after him to heavenly life.
You are correct to surmise that the city that Abraham was looking forward to was a real city and not some vague promise for paradisaic life on earth, the city's name is New Jerusalem and will descend down here on earth after the 1000 years where Abraham will have all the time in the world to inspect its foundations