Having lived in an 850sqft house in Idaho for two years, it CAN be done, and quite comfortably. BUT personally I feel you need another space to "Let your hair down" and relax, and to pursue your "Hobby or hobbies. This could be as simple as a covered outdoor space or a complete "Room" to include Air Conditioning and Heating. (Might as well be comfortable)
I plan on having the man cave in the garage which will be heated and cooled.
JYD#176 "dein Gott schickte mich zu zerstören" "Sic semper evello mortem Tyrannis" "Sometimes the chance of a zombie outbreak is the only reason I need to make many of my life's Decisions." General Delivery