Instanced housing wouldn't have customisable exteriors.
So then... what is the point of an instanced house?

Just expand the apartments system to include larger interior options, and an additional instanced external 'balcony/terrace' option. This would give the player exactly the same resources, without having to dance around the magical house that has 10,000 different interiors and a crowd of people always outside it queuing up to get into their version of it's insides.