Desirable property affordable? Experiences?

I wish you much success in finding the right property. If you can't afford it now, then certainly at another suitable time. If not you, then who. You are still young and earn very well.

It must be said that a few days ago we had another viewing in a similar price range (almost €700k) and instead of a private appointment with the agent, it was a mass viewing with about 6-7 families at the same time (all in their mid-30s, 2 children, etc.). According to the agent, that was not the only appointment either. That brought us back down to earth a bit, reminding us that there are still plenty of interested parties in the market.

I also wish you much success in your search. Eventually, the right property will come along. Better to search longer and be in a better position for the next decades than to excessively go into debt unnecessarily.

Edit: By the way, interested parties are not always buyers; many cannot secure financing, or it becomes clear to them at the appointment that it would be too expensive. We have several acquaintances who are looking; they have been to many appointments but always realized that it would be too expensive for them. Even back when we bought our house, before the crisis, there were interested parties who then backed out or whose financing fell through. That's how we got our house—it came back on the market because the buyer could not buy after all, so we jumped on it right away. We had seen it online before, but it was gone before we could view it. So don’t let yourself get worked up.

One has to say that a few days ago we had another viewing in a similar price range (almost 700k€) and instead of a private appointment with the agent, it was a mass viewing with about 6-7 families at the same time (all in their mid-30s, 2 children, etc.). According to the agent, that was not the only appointment either. That brought us back down to earth a bit, realizing that there are still plenty of interested parties on the market.

One should not be fooled by that either. I can hardly imagine that these families have a significantly higher income than you. They will only manage it if, somehow, they have enough equity. Maybe they just haven't realized it yet or don't want to admit it. See it this way: you are already one step ahead of many others who were there and can define your financial framework more realistically. Maybe that will be useful sooner than you think.

I wish you continued success in your search. I also congratulate you on your sensible attitude. It is not uncommon for interested parties to get carried away in their desire for a home and fall into a kind of obsession over a property, losing touch with reality and consequences. You have very neutrally drawn the consequences here. That is a healthy mindset, and I am sure that when everything fits, you will also take the plunge.

After inspection and "feeling out" regarding price negotiation, this property is now off the table for us. Various measures up to a complete renovation would have been necessary, and as has often been mentioned here, these costs would have very likely exceeded >150k€.

This confirms my advantage that the following real estate agent jargon from the initial post

Condition: Well-maintained but in need of renovation

is always equivalent to a complete renovation. Don’t lose courage in your search, more exciting properties will come.

One should not be deceived though. I can hardly imagine that these families have a significantly higher income than you. They will also only manage this if they somehow have enough equity. Maybe they haven't realized it yet or don't want to admit it. I see it this way, you are already one step ahead of many others who were there and can define your financial limits more realistically. Maybe this will be useful sooner than you think.

You all somehow believe here in Germany that there is no wealth. I would claim that the vast majority of people who are buying now (can) have a (strong) financial background in the family and are not high earners. I would not be surprised if families have also become more "generous" due to the current situation. What must not be forgotten: merely 50k from parents and grandparents already sums up to 200k excluding self-saved equity. If you also save another 100k here, financing is suddenly no problem even with an average income. Furthermore, I think a lot of "grants" are currently generated by early withdrawal of future inheritances. All in all, there will still be enough capital to avoid having to sell with a big discount in good locations. Moreover, not everyone necessarily has to sell, so the realtor's statement can be true – but of course, it could also just be a bluff.