Don't see a small space as a negative, see it as an opportunity! A small space gives you the chance to try some design techniques to make the space feel and appear larger; and you can get a little more bold with it, too.
When you're looking for a house, it's important to identify the items that are a priority to you; things that you are less likely to want to compromise on.
We are all finding ourselves home a little bit more these days- and while you should take the opportunity to a) create a balance between working (from home) and your free time, or b) get some outstanding projects done while not going crazy- this is a great opportunity to refresh your space with the items you already have. (Plus, we're all probably watching more HGTV than usual.)
Feng Shui - the ancient Chinese practice of arranging physical objects to attract positive energy.