Again, I'm one of those that loves to have a house in the games I play... but I can't bring myself to do it here, and I hope the explanation will be of some use to the developers.
First and foremost, the reason to have a house (for me) is to become part of the world. Star Wars Galaxies had several ways for me to do this. I would plant a house somewhere and watch the world go by while chatting in the zone. Players would wander past, perhaps stop and look in on what I was doing, socialize and so forth.
Here, there's none of that. The house is completely isolated from the rest of the world. There's no one to watch (often because you can't see over the walls), and there's no zone chat because it's an isolated zone not actually part of the world, and no one can actually just turn up and visit unless they happen to be on my friends list (which is very small indeed). So the main reason to HAVE a house doesn't exist for me.
Now, the houses themselves have problems.
The largest houses, like the Ebonheart Chateau or the Daggerfall Overlook, are so huge, and so EMPTY. They're CASTLES, which would ordinarily be populated by other people... servants, at least. Here, they're completely sterile, with no other life within. This is true of all the houses, but the big ones suffer the most as a result of it.
Many of the houses are decent for one reason or another, but lack in critical ways. I'll admit here, much of this objection is based on personal bias.
For example, there are several houses I rather like... but don't like, at the same time.
The Gardiner House in Wayrest, for example, has a great location, and as a result the somewhat limited yard still lets you feel like you're IN the world, as the neighbouring buildings tower overhead and around you. However, the house interior is underwhelming. Each level is basically a big empty room. There's no corridors, no separate rooms... I'd love to have a separate bedroom upstairs, perhaps a couple of distinct rooms in the basement. WALLS and ROOMS inside.
The Cyrodiilic Jungle House has a lovely yard, and the interior is nice, if small. However, its location is disappointing.
The Old Mistveil Manor (outside Riften, I think that's the name...) has a good location and nice yard, and the interior is quite nice too. It even has a glorious balcony... but you can't SEE anything from the yard because the walls are so high and what view is blocked by trees.
Perhaps the best house is the Strident Springs Demesne. It has a fantastic yard with a beautiful waterfall, and the interior is very nice indeed, with several rooms upstairs and down. The only things it's missing are a nice balcony (which I really like in any house) and a nice front porch (which many houses are missing). The problem with this one is its location again. If the Gardiner House was set up like THIS, I'd probably scoop it up right now... but it's not.
Perhaps the biggest problem is that we can't have the house we want WHERE we want it. If I want to live in Wayrest, I have only one option. If I like the Strident Springs house, I HAVE to live in that province, even though my character has never BEEN to that province.
Note that I am not even going to get into the pricing, which is pretty ridiculous.
I don't know if there's anything that can be done about any of this, but I hope the points I'm making are useful to the devs.
Exploring Tamriel since 1994.