We are a little farther down the road in a very similar situation (except our house is even smaller and we have two kids!) I don't think we ever made an intentional decision to stay forever, but at various forks in the road along the way, we've decided to stay each time. Sometimes that's been driven by cost of moving (we're in an extremely expensive housing market so it isn't possible for us to stay in our neighborhood and just buy a bigger home) and sometimes by wanting to prioritize money for other things. We've definitely spent as much in improvements over two decades as we did to buy the house (and sadly ours was nowhere near as cheap as yours!) I do try to think about improvements with an eye towards what other future owners might want to have in a home, and not just what I want--but there are also projects I wish we'd done years ago that we would have enjoyed benefitting from over the years even if they didn't add "resale" to speak of.

If you're happy and the space is enough, I would just take it a year at a time. Also remember that you can add square footage if it gets to that point--sometimes that's a better solution than moving. Stay in keeping with your house's character and with your neighborhood as you do improvements, and I think you'll be fine.

Your post really hit "home" for me (no pun intended). When I built my house (moved into home in Dec. 1996), if someone would have suggested that I would still own the house almost 28 years later, I would have laughed. I never intended to stay in this house. But life happened - and here I am. I did not live here the entire time - I lived out in Santa Monica for several years (starting in 2012) - but kept this house.

I came very close to moving several times - but something always caused me to change my mind (for example, I ended two engagements - and had plans to build a new home with my then fiancé both times). I wound up paying off my mortgage early back in 2010 - so, other times when I thought about moving, I always decided that I liked not having a mortgage. Plus, I love my neighborhood - beautiful mature trees + curving streets with slight hills.

My house is 2800 sf (without counting finished basement - media room, bar area, bathroom, workout room). I'm an empty nester - so is my significant other. When we decided to live together, we thought about moving - but everything that we liked would have added time to work commute + neighborhood would be newer = small trees/straight streets/etc.

I've been dealt some rough health issues = working less hours (I'm an attorney) - and not having mortgage has been really nice.

We decided to renovate this house to make it "ours." We tore down the large deck and replaced it with a nice patio (it has a large covered portion with a cedar plank ceiling + thick cedar posts + an amazing stereo system + outdoor tv - it also has a nice firepit area + another uncovered large seating area). The backyard isn't large - but there are no neighbors behind us - and with the way I had landscaping installed back in 2003, it feels like a completely private backyard.

We've renovated two bathrooms so far - two more to go. We will be gutting the kitchen pretty soon. I wish I wouldn't have let my ex husband talk me out of the third garage space when we built the house - but I never imagined that I'd still own this house - so, it was something that I traded in order to add a much larger kitchen than what was originally planned (also, I recently discovered that since my garage ceiling is a little over 14'high, I can add a car lift on one side iof the garage in order to store my convertible Porsche instead of using a rental garage nearby - I had to give up a space in the garage to my SO when he moved in several months ago).

My neighbors directly across the street have lived here the entire time (their youngest daughter has been best friends with my oldest daughter since basically the day we moved in - they were five - they are both pregnant and due in Jan and Feb). It is so nice having them across the street. I have another set of neighbors on one side who purchased the house on the right side of my house about two years after we moved into our house (their daughters used to babysit my girls).

We could definitely live in a smaller home. There are three bedrooms + two bathroom upstairs that are rarely used (thinking about converting one of the bedrooms into a large closet/ "dressing room" for my SO (he is an attorney also - and wears a suit/tie to the office every day - even though he doesn't need to - he has more clothes than I do - over 300 ties + 60 pocket squares + a TON of suits/sport coats + dress shirts and MANY nice dress shoes - and that's just work clothes - I don't even want to guess about how many golf shorts/shirts/etc. that he owns + other casual clothes!) My primary closet is 8' x 18.5' - but I am not used to sharing 🤣.

I am also converting my formal dining room into a "wine room" - with four leather chairs that form a conversation area - I have seating for four at my island (which is one level - my builder thought that was a crazy idea back then to not have a raised bar area for seating) + a table in the kitchen that sits 6 + extends to sit 10/12. I don't really need a formal dining room also. I don't really need a formal dining room that's rarely used.

Whether you should spend $80k on a new kitchen depends upon the FMV of your home now. Also, if you are going to make it your forever home - then resale is less of an issue (I believe that the "guideline" is that you shouldn't spend more than 15% of the value of your home when renovating your kitchen - but if you will be staying for many years, if you have the $$, you should put in the kitchen that makes you happy!)

When I look back at the homes I almost moved to, I am happy that I stayed here. This house is more room than we need - I don't know what I would do if I had built the 4,200 sf home I was planning back in 2009! A 2,800 sf house (+ 800-1,000 more sf in basement) is more than what we need. Plus, a smaller home would be easier to take care of as we get older (plus, less maintenance needed).

The size of your house doesn't matter as much as the location + your neighbors - there are many people who live in areas where fully gutting (restoring) a 1,400 sf house is worth it due to the location + the cost/size of other homes in the area. I have a friend who lives in Toronto who did a full gut on an attached home - and it's probably between 1,400 - 1,500 sf - and it's beautiful. They made such good choices re: new layout that it functions better than houses that are much larger. It is a very nice home. In Chicago, a 1,400 sf home in the right location (with the right renovation) would be a perfect place to age in place.

Husbands family there were five kids in one of those little post war bungalows . No one even questioned if it was too small and should they move.

My sister and hubs are in a small one story home near City Park in New Orleans. They had one son who .is now grown and married in his own house and the small and well built house serves them very well. They will be likely to age in place in this house. Of course it had lots of rebuilding after Katrina. So much of it is newer because of that. Nice little house, fantastic garden, good location and they know and party with all the neighbors. It IS New Orleans and anything is as excuse to party with food and friends.

I'm coming in late, but I WANT YOUR HOUSE! Really, it sounds ideal -- the neighborhood, the school. I think if I were in your shoes, I'd keep the small house /work on making it perfect. I respond to your vision of a "jewel box" -- I saw that term in a house magazine decades ago and it stuck with me. I'd say work on a plan and implement it over the next years.

Thoughts:

- Is your daughter likely to be an only child?

- Remember that a small house "saves" in utility bills and tax bills.

- We all know that things cost more, more, more as the years go by -- and a small house is a way to stay insulated against inflation.

Bigger is not necessarily better.

What has made you think that your small house might not be worth putting your heart, soul, and money into it, when clearly there are so many things you love about it, your community, and neighbors? Is it a kind of belief system running in your head that tells you a small space is somehow inferior? Are you trying to "keep up with the Joneses?" Has someone made a remark or flouted their large space and now you feel your house isn't up to snuff? Whenever we compare ourselves to others, we're bound to come up short.

I've been an apartment dweller my entire life. Most likely that's why I feel most comfortable in smaller spaces. My dream is to build a tiny house someday. My last apartment was twice the size of my current one and I hated it. I truly didn't know what to do with all that space, so I just kept filling it up with more furniture and more stuff. I happily got rid of most of it when I moved to my current place (approx. 530 sf). Now I have just what I need, it's cozy, and I don't care if other people might feel sorry for me living here - they can keep their 5k sf McMansions and the heating bills to go with them.

I remember visiting some friends years ago who had a house about the size of yours. It was lovely! And cozy! There was no need to fill up expansive rooms with extraneous furniture they didn't really need. It didn't cost a lot to heat in winter or keep cool in summer. They had just what they needed and were very happy. I also remember the friends I had growing up in the 60s and 70s - nobody in our town had a huge house. Most people had small 3BR Cape Cods and happily raised their families there. Maybe a few added on a den in the back or something, but they all seemed to proudly invest and put their hearts into maintaining, improving, decorating, and living in these pretty little houses. Most of my friends shared their bedrooms with a sibling and there is absolutely nothing wrong with that! Growing up in an apartment, of course, I shared my bedroom too. I think it's crazy that some people think every kid needs their own bedroom.

It sounds like all the work you're planning to do will not only accommodate you for years to come, but will also increase the value of your home, so that's a good thing, no?

I am reminded now of a little plaque my mother had hanging in the kitchen, with this saying on it that I will never forget:

Home's not merely four square walls.

Home is where affection calls.