The addition of a finished basement including heat to make it legal additional square footage, certainly raises the value of any home. However the amount you spend on that improvement returns only about 55%-65% on your investment... and the range deals with the location of your home. Many other variables will contribute to the "how much" value factor and some of those have been mentioned in the other answers. But for example, if the basement becomes a 3rd BR you have increased the market for your house by a significant factor due to demand for 3 BR homes vs. 2 BR homes. Also, as cautioned, don't spend money if the improvement will price your home out of your neighborhood. As a general rule of thumb, buyers will not pay more for features or size in a neighborhood comprised of homes appraised at a relatively low price. However if the neighborhood is a high priced one, and your house is the "black sheep", buyers will be more likely to slightly overpay recognizing the return on investment the house can eventually bring when improvements are made.
Best of luck with your decision.
I too on West Ave...if you like to talk call me.