Quick Question: if Player 1 and Player 2 buy housing at the same specific location, and want to play with each-other in the same game instance, whose house will be at the location and where would the other player's house be, if they wanted to access it? Related: If you and all your (many) friends have the largest size house in City X, and there are a limited number of plots in City X, doesn't that by necessity mean that not all of your friends houses can be in the instance at the same time? Apologies if this has already been addressed - I haven't been keeping up with the forums.
Lots are not instanced, the same lot will be there for all players, all "mini-instances". So only Player 1 OR Player 2 will claim the lot. Related: yes, housing is limited (no exact numbers yet).
housing is not instance while online, single player offline a different story. Player 1 or Player 2 will have a house their not both, if they own a house plot, you can however say one person is kin of the deed and they will have full access to the house.
That's not entirely true. A specific plot of land can only be owned by one person at any given moment. If that person neglects to pay the upkeep on their plot or fails to login for a specific amount of time, that plot will become available again.