I think it all depends on what SE would present as instanced housing. Personally I want a yard (if instanced, larger than a large with way more furniture slots), the ability to alter the house size, the ability to choose where the house is on the plot, ability to choose location and some variations for that location and a nice skybox with the eventual ability to control the weather with forbidden technology. And since it's instanced, let's add in some optional farm space separate from the yard with eventual sprinkler upgrades or something because even farming games know how quickly tending to each plant becomes mundane. Maybe some animal raising thrown in there too. Oh and also a personal airship dock, because airships need more love.

Unfortunately I think best case scenario for instanced housing in this game is slightly tweaked apartments. No balcony though as that idea got scrapped already.