Part of the answer is the cost of land in California, it's very expensive, new vinyards are probably paying in the millions for their land. Then add in taxes, labor, fees and the cost of water and you have some expensive wine.
I am putting in a 1/4 acre of grapes this week to see how it goes and then a couple of acres next year if all goes well. If in the Ramona area of Southern Cal there are dozens of new wineries popping up each month, mine included. Check them out if you can, becoming the Napa area south.
Yes my wife and I freaked out buying our first house ! We have many fond memories of it for lots of different reasons, some good some bad. Congrats and enjoy !