Strange house dream, a little help?

The house would likely represent the person you were when you lived there, the attitudes you had, the emotional atmosphere you were in. Now that you are moving in real life, it is a break with the past but you may not be able to break completely with the inner attitudes or mental impressions left over from your experiences in the past, as symbolized by the old house. And its being your grandmother's house suggests ancestral attitudes handed down thru the generations, things that persist even though they are no longer appropriate to the life you live now and the way you choose to relate to your own kids.But those things have a way of clinging to us unless we consciously disengage from them. The discarding of the old ways is like the home falling apart and the negative feelings that come up in relation to those old family issues. The renovated place, with the people you don't know, is like the unfamiliar unknown that is your future that you are about to step into. But there is a positive feeling about the new place, even though it does not yet feel permanent (only a rental).

Think about what it is that makes you sad about leaving the old place. Maybe there is some unfinished business. Don't be in too big a hurry to push the past (and your mother) away, because if you are still carrying with you the emotional residue, you will have to deal with it sooner or later.

The worsened condition of the house in your dream makes perfect sense because it is symbolic of your unfulfilled dream to restore it.

just a memory now

As you say, you are moving now, so moving would normally be a part of your dreamworld. There is nothing strange about your dream. Your "old house" in reality represents the other house you are looking for. Of course you are sad to see the damage that age has had on the house but Life moves on, and we take one thing at a time, from one house to the next house, to the next dream, etc.