I recently had a conversation with my past client and friend, David, about whether it makes more sense to remodel / expand your existing home or buy another one. It's a question I know many homeowners are wrestling with, and one I actually went through myself last year!
At the time, I was debating whether to expand my old house or buy another home and remodel it. I spent months running the numbers, talking to architects and contractors, and weighing the pros and cons.
There are a few things worth considering beyond just the cost of remodeling versus buying.
First, remodeling costs have gone up dramatically. I built an ADU back in 2020, and I wouldn't be surprised if that same project cost at least 50% more today. It's not just labor. The cost of materials has gone up significantly as well, making renovations and additions much more expensive than they used to be.
Second, your mortgage rate. If you're sitting on a mortgage below 4%, giving that up for today's rates could mean a substantially higher monthly payment.
Third, property taxes. Thanks to Prop 13, many longtime California homeowners have assessed values well below market value. Buying another home generally resets that assessment to the purchase price, unless you qualify for a transfer or exemption. Certain additions can also increase your existing home's assessment.
So, what did I end up doing?
I moved!
I was actually very close to signing a contract with an architect to expand my old house. But at the last minute, I decided to tour a few homes just to see what else was out there. One thing led to another, and I bought a new home in 2025.
Was it the cheaper option? Absolutely not! My mortgage rate went up, I spent more money, and I ended up in a different neighborhood.
But here's the thing. Even after spending all that money on the expansion, it would've only gotten me about 60% of the way to my dream home, and that came with a hefty remodeling price tag. The new home, on the other hand, got me much closer to what I really wanted.
And that's something I think gets overlooked. Not everything comes down to dollars and cents.
If you love your neighborhood and your home has good bones, remodeling or expanding could make a lot of sense. But if you're trying to change things that simply can't be changed, moving might be the better option.
My advice? Run the numbers on both, but also think about what you're ultimately trying to accomplish.
Sometimes remodeling or expanding makes more sense. Sometimes moving does.
And if you're having the same debate, I'm always happy to help you think through the options!