Given a binary choice, it has to be -

2

However, I'd much rather see the present system kept and fully instanced houses developed alongside so we have a choice. I don't care about seeing my neighbours because it's such a rare event so I would be very happy with an instanced house as long as it was decoupled from the timer.

The present systems sucks. It sucks less than what we had before, but not by much. It's time the devs stopped clinging to this idea of neighbourhoods and just implemented a system where the supply of houses actually has a chance of meeting demand.