I am speechless with this price

First thing is, I don't want myself to get stuck in this kind of decision making because it's very brutal. Of course, the general guideline is that if you buy for primary residence, you shall buy the biggest house possible. However, in California's case, the situation is too brutal, following the general guideline will at least make myself uncomfortable if I were you. That's why I don't want to get stuck in such difficult decision making. 1.4M stuck in one house is simply too much money in one place. If I were you, I probably won't be able to find a good answer myself. In fact, no body can answer your question accurately because in California, most conventional rules or guidelines don't apply. Bayfamily's suggestion may make sense, at least to me if I were you, but I am not you :-) Good luck