Very good question. Personally, I was in a similar situation a few years back. The deciding factor for my family was when we looked and found our dream house, even though we loved where we were, we moved to a better place for us.
With the market the way it is right now, you could possibly upgrade without the hassel of the renovation. If you have young children, beware of living in the middle of renovations, it is not healthy to breath in the plaster dust. I would be happy to send you a list of everything in your price range in Port Washington. It would be good for you to know the inventory, then your decision will be easier. Sincerely, Edie Katz
You can easily spend $150,000 and add, say, only $75,000 to the value of your home, depending on what you have in mind. You can also over-improve the home--a four bedroom home in a neighborhood with only three bedroom homes, for example, or adding more fancy stuff to it (e.g. wine cellars) than the local market cares about, as Jo-Ellen suggests
On the other hand, right now there are a lot of bargains out there for buyers.
I know agents are always supposed to say stuff like this, so pardon me, but this is what I really think: If it were my money being spent I would not renovate a livable house in Port, I would sell it and move on.