It appears the "nook" in the cabinets housed a refrigerator.

It's really hard to visualize the space - and thus what you could do to it - by the one photo you posted. Can you post a layout with dimensions?

I put LVT in my finished basement a year ago and am so happy I did. Carpet shows traffic patterns and doesn't last as long. I got an inexpensive area rug (pattern was being discontinued) to define the TV/family room area. I also painted the walls a white with a yellow undertone to brighten it up. The only thing with LVT is that the installers need to check to make sure the floor is relatively flat before installing. If it isn't, they have a way to fill in the low spots. While you won't be able to get it completely flat, just make sure you don't have any low spots in noticeable areas like at the bottom of your stairs. Most basement floors aren't flat (you can't tell with carpeting), so make sure they check.

The floor doesn't have to be the same color as the upstairs, but this also depends on how the stairs are covered. Mine are carpeted so you can't tell the floors aren't identical. If you put new carpeting on your stairs, tell the carpet store you are doing stairs so they can recommend a product that will hold up well for that use.

We just installed LVP in our 1960's basement, and I couldn't be happier. You have to be careful with carpets in basements as they can trap in moisture and cause it to smell like mildew. My mother who is an interior designer by trade and used to work for a flooring company, would always recommend LVP in the basements since they are waterproof.

It was a little bit more prep work because we had to pour self leveling concrete as we had a lot of unevenness in our floor but I really do love how they turned out, and they are easy to install yourself if you have the right tools!

We also painted our walls an off white; Shoji white from Sherwin Williams is a beautiful color.

I think painting the walls an off-white is a good start and something you could do right away. But I would hold off on any changes to the flooring until you have been there 6 months or a year. You want to find out what the chances of seepage are before you select any new flooring. However, if the carpet smells moldy or like pets lived there, I would remove it.

I think painting the walls an off-white is a good start and something you could do right away. But I would hold off on any changes to the flooring until you have been there 6 months or a year. You want to find out what the chances of seepage are before you select any new flooring. However, if the carpet smells moldy or like pets lived there, I would remove it.

Would not choose carpet. LVT and then you might consider a rug to define different areas for different purposes.