Great question. The first question is would you be happier in your current home if you renovated it? If you chose to sell and buy again, there are additional costs involved which would not apply to renovating your home. For example, there are selling costs such as real estate commissions and title transfer. Then there are closing costs to buy a new home.
If you choose to relocate to a less expensive area, the annual savings could make it worth the move. You could save money on real estate taxes, state income taxes, sales tax and daily services. You could downsize and buy a newer home with less maintenance. If you choose to renovate, I highly recommend you join Angie's List so you can find the best contractors in your area.
Hope that helps :)
Margie Casey, Founder
With this you both can make a decision that is right for you.