Would you guys think the Unity engine would be a good choice for a MMO where a player can gather resources such as wood then use the wood to build a house for example, and have the house remain persistent in the world?

If not, are there any other suggestions for an ideal engine? My focus is more on the in game building aspect, not so much the MMO, so perhaps allowing a player to only build in a small server with say 16 (or even 4) people at a time and portal between servers.

I previously was using cube 2 but I do not like the graphical limitations, but would still consider it or Platinum Arts Sandbox, if it was found to be most ideal.

I am also interested in Cryengine, seeing as I read something about persistent real time updates.

Yes, it is good for this if you are using Unity's built-in networking. Not so great for MMOs but if you're looking at 16 players it will suffice.

The reason I say this is because Unity has built-in networking features that will facilitate instantiation of objects on all clients very easily.

Network Instantiate Documentation

Two other engines I am interested in are the Hero engine and Esenthel engine, what do you think? I am very interested in overall easiness, that's what I liked about Cube2 engine, I could just jump in and start mapping, because I will no doubt need to have some material in order to recruit members. Also I will probably be interested in using Blender for modeling, unless you guys recommend something else.