Since the fireplace is already painted, you can really paint it any color you would like - or have a façade built around it. I don't think there is an issue with it not having more height - because even though the room is 2 stories - you could do a large canvas art piece over fireplace and that would put the art where it should be, in terms of placement for viewing - and that would also create more height. I actually think the floor is more of an issue in this room. I am not sure if that is a carpet on the floor. I think that if there were wood floors in that room similar to what appears to be in adjacent room (in your second photo) the fireplace would actually work fine as it is... against a wood floor of that color . The carpet - or whatever it is - is dragging down the space, makes everything appear drab.

First off, you do not have the world's ugliest fireplace—not even close. You can see the prize winner here (scroll about halfway down)— https://laurelberninteriors.com/2016/12/14/ugliest-stone-fireplace/ You might also get some ideas about what to do with your fireplace.

I would urge you to move in and get settled before you worry too much. Your room and fireplace have great potential.

Congratulations on the new home. Does the ceiling have a slope to it in the living room? If it does be careful with how extending the lines with the ceiling. We have painted and had custom mantels made for our clients to update their fireplaces. Repainting and built-ins may be the extra touch you are looking for to update your room. Here are a few examples from some of our clients.

Looks like a direct vent gas fireplace unit. Revising the surround should have a number of options depending on you design preferences. First, verify the age and viability of the existing unit. Then explore options and budgets. Here is one we did recently that took a very plain firebox and dressed it up with stone. The struggle was to keep or not keep the window. We voted to keep it! Plus hid the television and component parts with a custom barn door for a now you see it now you don't look. And allowed for a larger more useful living space.

You could paint or cover the fireplace and/or paint the wall in a color that would be complementary to carpet - if you are planning to work around existing carpet, etc.

But this is what I mean about the floor - and how wood flooring in the space could make a difference. If there is wood under the carpet - might be worth considering taking carpet up - or perhaps continuing the wood look from other room with new flooring. Just a rough visual:

I would LOVE to put new wood flooring on the first floor, but they actually just put this carpet down 1 week ago and I believe I can at least live with it for a year. It would not have been my choice! What program did you use to change the flooring to wood in the photo? Very cool!!

Some have attached links and pictures of befores and afters. Your fireplace has massive potential!!!!

I appreciate all the suggestions and especially the photos, thank you all. If the carpet were not brand new I would have it replaced with hardwood, but that will now go on the back burner and be done later as budget allows. (The house needs a lot of updating!) I guess after looking at the link in the second post, maybe this one isn't the "worlds ugliest!" But it is pretty darn bad!!!

Hardly the world's ugliest! Your home is very nice.

Thank you. :) I used Paint. It's rough, but I'm glad it gives you the general idea.

I understand about the floor. I was kind of groggy when I posted my first comment this am - so please forgive my ramblings about the floor. I realize that sometimes I just blurt things out - and then later find out details like, "Hey, the carpet was just put down a week ago!'' As I said - you can definitely work with it - do the wall in a color that would complement it, etc. But I'm glad I could give you the other view.

And if you do opt for art over the fireplace - which would extend the height - just don't use your most treasured painting, etc.... With heat from fireplace, you don't want to use something that is very valuable - in terms of sentiment, dollars, etc. As another option, you could also do metal art - which would offer some reflection. They did that here:

A couple more views:

The piece doesn't have to be huge to bring in height - although I would probably go larger than the one right above here... . but the vibrant colors make it seem larger - and I love how it works with the plants... also I think the interesting lighting works well with and enhances the painting - adds interest, balance and height.

Your space is really nice and has a ton of potential. The fireplace is also nice (believe it or not... ;)) There is so much you can do with all of it. The world is your oyster. :) Congratulations!

Thank you again and I like your suggestions. I wish the owners would have just left the old carpeting then I would have removed it and put in hardwood, but since they just put in all new carpet I feel like I can live with it for awhile at least. The hardwood look makes SUCH a difference though. I do have some large art pieces so possibly they will improve the bare look of that big wall. Have to change the wall color, too!

You're welcome, my pleasure.

It's great that you already have some large art pieces... a large piece of art over fireplace is all you need.

The wood works great in your space. But you can work with the carpet... you can have fun with it. You could layer a rug, also, if you wanted to - as they have done... and I would suggest a much larger rug. But you could just work with the carpet, as well. The carpet looks like a shade of grey... Monitors are not always reliable on color - so I am not 100% sure... But if you wanted to use your fireplace as it is, grey and brown work together - and can actually be a very interesting combination. You don't have to bring a lot of brown into the design just because you have a brown fireplace... but you have that option... to bring in some accents of it - and it could be interesting. As far as paint - I don't usually advocate grey wall paint... especially now, with the grey trend not being what it used to be... but with your carpet (if it is grey) - I think a light grey - a little lighter perhaps than the carpet... or antique white... maybe even very light beige... But I think light grey, antique white... along those lines. The idea is to sort of sync up the carpet and the walls. I also like to recommend going green on the paint... BM has a couple of lines - Natura, Aura... and there are others.

I saw this space in Sydney/this pic here on Houzz, the other day, and saved it... love some of the elements here:

And below: More shades of grey and white with brown, black accents... love the orchid, art and faux fur throw.

Modern farmhouse...

when I get a chance I'll post some more pics for ideas/inspiration.