Compare the all-in remodel cost against the transaction cost of moving, which runs roughly 8 to 10 percent of the sale price once commissions, closing, and moving are counted. Remodeling usually wins when the location is right.
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Most people compare the remodel quote against the price difference between houses, which leaves out the largest number in the moving column. The real cost of moving. Commissions and closing costs on the sale, closing costs on the purchase, moving expenses, and the near-universal round of purchases and small projects on the new house. Together that commonly runs 8 to 10 percent of the sale price and it buys you nothing physical. On a $450,000 house that is $36,000 to $45,000 before you have improved anything. Against that, the remodel column. An addition in this market runs on the order of $150 to $300 per square foot depending on complexity and finish, a kitchen renovation runs a wide range driven mostly by cabinets and appliances, and a bathroom is the smallest-ticket meaningful project. Add the cost of disruption, since living through a kitchen remodel is genuinely hard and moving out for a stretch is a real line item. When remodeling clearly wins. The location, lot, schools, or commute are right and cannot be replaced. The house is structurally sound and the problem is layout or size. Comparable homes with what you want are selling for well above your all-in remodel cost. When moving clearly wins. You are proposing to add so much that the finished house would be the most expensive on the street, which caps what you can recover. The lot cannot take the addition because of setbacks or septic. Or the list of problems is long enough that you are effectively rebuilding. One local check worth doing first: confirm the addition is permittable on your lot given setbacks, easements, and any HOA restriction, before pricing anything. Permit requirements are set by the city the property sits in, or by the county for unincorporated areas, so confirm with that office before design.