I gave it a 3/10. Yeah it's not one which walks the usual paths but I just didn't find it really engaging. The victims didn't put up that much of a fight, a guy mentally ill, an old lady (they couldn't do much) and a young lady who tries a bit but not much.

It's rather obscure so overhyped no and not sure if this was the first in its genre, what genre is it actually? There is home invasion, torture (if you can call it that) and murder. The dominant voice over story telling/thoughts is a trick that has been done to death during the early exploitation cinema during the 60s. Especially Doris Wishman did this a lot.
I don't mind low budget but being in the 80s I don't expect a movie to be predominantly voice over any more. He didn't have much interesting to say/think but that's just me.

So no for me it's not a lost gem. It's raw and cold I give it that but people thinking it is realistic that's far fetched. I thought it was incredibly unbelievable he was actually able to drive a car given his first trial ended in a collision and a bit later he drove like an experienced driver uh what?

3 years later came Henry portrait of a Serial Killer, a much better movie in the genre IMO.
Angst has its fanbase and I guess it's because there is not many movies like it. But I doubt it was the first. I know a few older even cheaper but have to look into my list. Voice over can be nice but it got rather monotonous after a while. And yes there is definitely people loving it because it's not American. Especially in Europe there is some who loathe American stuff but a French/German whatever copy of it is suddenly fresh. Not saying Angst is a copy of an American movie but personally I don't think it showed anything captivating or interesting I had not seen in some older flicks.

Anyway I'll search for the titles I had in mind. Deranged (1974) is actually one that might fall into this category and I think it's much better than Angst too.

I noticed that, in regards to the voice over stuff, that some information was repeated. Like, we learned quite a bit about the guy in the beginning voice over ie., him cutting the head off a swan. Then, later in the film when he's giving us his thoughts, he repeats things we were already told.

I found that odd and a blatant mistake that could've been easily fixed.

I recall Shaza also being a fan. She's the one who I learned of it from anyway.

It's not a lost classic, but I don't think it's over-hyped either. I've never seen any hype for it (if there was on the HB, I wouldn't know.) Just a mention of it once in a while.

I liked the movie, but other movies from the same period did the whole following the actions of a murderer thing better. As Johan already mentioned, Henry, or even Maniac. Both have better pacing anyway.

Yeah, Maniac and Henry are far superior. Possibly even Man Bites Dog as well, but it's been 10+ yrs since I've seen that one.

To me a classic but not lost. It has a Blu Ray release and all these days right? 37 user reviews on imdb, 58 critics. Based on the crimes of Werner Kniesek though doesn't adhere strictly to his facts (at least according to Wikipedia), though the voice-over comes from the journal of unrelated earlier German serial killer Peter Kurten. One of the surprisingly rare horror films that completely grips me from start to finish, the direction I find of rare quality even in the genre at large and vanishingly so in anything nasty, action packed yet unflinchingly intimate, showy but not contrived. Erwin Leder gives one of the few bug eyed nutso performances that truly work. I've not seen anyone who really compares to his inhuman human beast. I love that he's pathetic, I love that he lucks into everything and loses through stupidity. That's how most of those people really are. I love the pace and structure, how it doesn't betray itself. And of course the violence, and the vintage industrial/creepy score. As killer flicks go I slightly prefer Henry, though I rate both 10/10. Closest contenders after would be Schramm, Violated Angels, maybe Confessions of a Serial Killer ('85, the uncut version that played on UK TV a few times years back but is apparently otherwise a bit of a bugger to find). Man Bites Dog for funzies.

'Lost' classic or victim of the overhype machine?

Neither. As bloodwank mentioned, it is not "lost" and has a good Blu-ray release. I don't think it has been overhyped either. Shaza recommend this one to me back on one of the IMDb extreme challenges.. and it turned out to be my highest rated movie of that month.

The direction was amazing, music good. It definitely didn't feel like your average horror film from the early 80s, and I appreciated that it was a bit off the beaten path.

I think this is exactly the reason why it is not overrrated.

and had so much trouble killing its occupants.

I don't really get this as a criticism. It's supposed to feel real. The killer is not Michael Myers or Jason Voorhees where he can dispatch a victim in one fell swoop .

The reason, to me, that I felt it was "lost" (at least at some point) is because prior to, like, 10 years ago I never saw this movie ever ever mentioned anywhere...ever. It started making the rounds on torrents like Cinemageddon where I actually seeded a copy, but it was without subs and didn't watch it. I realize that it's had a blu-ray release for a little bit now, but in my mind, it's a movie that fell through the cracks for a couple decade until just recently. I've never been aware of a VHS release of it either, at least here in America.

To me it's overrated because for the people who regularly pimped it out on the old boards, they spoke of it like it was the holy grail of horror films. I enjoyed it, it just didn't knock my socks off like I hoped, I guess.

The reason I criticize the film for having the killer take so long to off his victims is because I felt it brought the pacing down substantially. Him having trouble alone isn't a problem for me, no. Long stretches where he can't handle an old woman and my mind is beginning to wander and even burst out at one point, "fucking KILL her already!" Kinda tedious, imo. When he finally left the house and was driving I got excited....like, "yeah, let's see where this goes next!" only to be reminded that this was, sadly, the end.

Yeah, I can understand but I guess I didn't get the same feeling of tedium and annoyance as you did at the killer's inepititude in killing the old woman.

Fair points though.