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The performance target of "linux desktop running lxd" and the price tag "not crazy expensive" is not very clear...
I would personally look for a fanless barebone pc and equip it with as much RAM and storage as you like. One example for this could be the Zotac ZBOX CI629, which you can get for around 400 Euros and has a 13th gen Intel i3 built in.
Is this within your budget?
Yes i would say 1000-1200euro tops for the budget with option to add more ram later. Would you think i3 is enough? I am not too familiar with the newer generations
Even a raspberry pi can run linux with an lxd desktop, and this i3 is a few times faster than a raspberry pi. But it depends on what you want to with it...
I need it for normal desktop use. Email, coding, browsing (no gaming)
Then you probably don't need 32 GB RAM, unless you've measured actual in-use RAM and found that you need it. Halve it to 16 GB and you'll probably find more options.