I agree with many of the responses below. Will it make it harder to sell? It may but just as you are choosing to buy this home, another buyer will too. Look at the other homes in the area? Are they occupied by owners? What's the value of their homes? Did they buy before or after the jail was built. Are homes selling? Is the market steady in the area? Declining?
The truth is that people buy homes near cemetaries, prisons, tension wires, schools, on main roads, on quiet streets, near light commercial zoning areas, etc.. Everyone chooses where they want to live and what works best for them based on their situation, price range, etc. I believe in the phrase, "there's a buyer for every home" and one day if and when you try to sell it, there will be a buyer for it then too. Will pricing be affected by its location? Maybe but pricing will also be determined by what the current market value is then too.
Unfortunately, its a big decision. However it is a decision that only you and/or your family can make. Write down the pros and cons and see which outweighs the other.