Lose 25K earnest money or complete the purchase

My husband and I made an offer on an 685k townhouse style condo in suburb Seattle about 2 weeks ago and now is in process of closing. We are having cold feet about this place because we were rushed into making an offer, since there was already two other offers made the day we visited. We thought it was a good deal and went with it, because we saw some new constructions nearby were selling for 740k+ with the same builder and floor plan. But now I realize the place was not what I wanted: its tightly packed and you look into a courtyard which basically is rows of other people’s windows; the windows are small and there is not much light; no walking closet / small closet space and with 1400sqft / 3 rooms, I think it will be too small since we are planning to have a kid very soon and have parents over. The master bedroom only have a shower as well. Most importantly, I think we overpaid since the same plan were sold for 650k December last year. The real estate agent rushed us into waiving everything so if we back out now we would lose our earnest money of 25,000$... In retrospect there is nothing I liked about the place, we just lost offers to bidding war before this and were in a bad state of mind... We thought about just completing the offer, but with the current market and uncertainty from COVID19 I am not sure we would make the money back even in 5 years, and tbh I really don’t like the place and don’t see myself in there for 5 years... on the other hand 25k is a lot to swallow. What should we do in this case? I am losing so much sleep over this...