IN my experience, the formal living room has become a den/computer room/office. Do you have a separate den? If so, I'd say go for it. Kitchens sell.

its all a balance. it depends on how small your kitchen is now and what tastes are when you go to sell.

when we were looking at houses 7 years ago i passed on several that had posh kitchens taking up about half of the first floor, at the expense of living space. if the kitchen was half the size i would have made an offer.

We did that exact reno 10 years ago and have never regretted it. We also have an area for a dinette but chose to make it a sitting area.

Go for it!!!! We are building a new house with no formal dining. We will have a single, large dining area between the kitchen and great room. It's open space with nice flow and we'll be able to host large formal dinners in addition to casual weeknight dinners. What would've been a formal dining room will be my office and the expanded walk-in pantry for the kitchen :-). and the office space will now be a cozy library (tech-free space). We have a second office in the basement.

As a previous poster mentioned, do you have another space on the same floor like a den/study? In our last house we had a large eat in kitchen and with super young children we made the formal dining room into a playroom because it was a separate area and could be closed off with baby gates. We certainly didn't miss it as a dining room, but only because our kitchen could accommodate a large dining table. In our current house, we have a large great room off the kitchen and a formal dining next to kitchen (kitchen has no space for eat in). Additionally inside the front door is a study on the right and a small formal living room on the left. We use the small formal living room as a music room / play room. So again there is some flex space. As a buyer I would be ok without a formal dining as long as the kitchen accommodated a large table and there is another room (not the great room) to handle an ad hoc use.

Just go for what you like and how it accommodates your family's lifestyle. My family loves having a formal living room (that we use only during the holidays), and I enjoy serving special dinners in a formal dining room where the kitchen is out of sight. I'm in my late 50's and know that my daughter's prefer open concept living with their young families. They come home during the holidays and enjoy the "formal" rooms then. :)

Sounds like a really big job. Are there any pictures of the kitchen and FLR?

What is your budget for this? 100K? 200K? 300K?