I assume you’ve also checked out parts of Del Mar? For example, here’s a listing on Durango Drive, which faces west, looking over Crest canyon (open space), and it might work well for you – http://www.sdlookup.com/MLS-100032211-13861_Durango_Dr_Del_Mar_CA_92014. It’s $1.39 mil, but if you don’t need that much square footage, you can find something in the $1mil range in this area. Check listings both north and south of Del Mar Heights Road, bordered by Crest Way to the west and Mango Drive to the east. If you’re interested, it’s easiest to check this area out by going to sdlookup.com and choosing the “map view”.
It’s a great neighborhood with lots of families and is walking distance to two award-winning elementary schools, Del Mar Heights and Del Mar Hills, both within 1/4 mile of each other. Both have a smaller, more intimate, but older feel than the newer Carmel Valley elementary schools but are also in Del Mar Union School District and have API scores in the same range as those mentioned in Carmel Valley. Lots of people in this neighborhood work at UCSD, which is probably about a 10-minute commute south on the Coast Highway and the bonus is that your wife would get to drive past breathtaking views of Torrey Pines State beach every day. We live in the area, have kids in the area schools, and have lots of close friends/neighbors here, and we absolutely love it. The houses are older than Carmel Valley but a little closer to the beach, the canyon, etc. If you’re up for it and if the houses in the area don’t meet your needs, you can also usually find a decent deal on a fixer and remodel/expand.