01/22/2026
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Below is a chart that shows the average price per square foot of homes sold in Palatine dating back to 2022. I want to share an example. I didn't intend for this post to be long, but understanding price per square foot can be very helpful to both buyers and sellers. If you have any questions, please call text or email. 847-630-6706 [email protected]
A 2,000 sq/ft home in 2022 sold on average for $170 per sq/ft. Value equals $340,000.
That same 2,000 sq/ft home in 2026 sells on average for $230 per sq/ft. Value equals $460,000.
That is a $120,000 increase in just four years! That means on average, a person who bought a 2,000 sq/ft home in 2022 has added $120,000 in equity based on todays price per sq/ft.
We often speak with buyers who are waiting for interest rates to fall before buying. In 2022 the 30 year interest rate was as high as 7%. It currently sits in the low 6% range. While there are differing opinions on where interest rates will go, a common theme is that they are not going back to 3% any time soon.
The trade off for purchasing this home (or not) in 2022 vs 2026 is .75% savings on interest rate vs adding $120,000 equity. The $120,000 additional equity far outweighs the .75% interest savings, especially when you always have the option to refinance.
That $120,000 added equity will also help you secure a lower interest rate and eliminate pmi insurance when you do refinance. For example, if you put down 5% in 2022 ($17,000) you would have to pay pmi insurance in addition to principal and interest because you don't have 20% equity in your home yet. Your original loan balance would be $323,000.
If you made all of your payments from 2022 to 2026 your mortgage balance would be roughly $305,000 today (remember the first few years your payments go towards paying a majority of the interest). Based on a $460,000 value today, you would have roughly 33% equity which would allow you to eliminate the extra pmi payment as well as qualify for a lower rate.
The increase in price per square foot has been steady for years and with low inventory, we don't see it stopping in the near future. If rates do fall significantly, that is going to help increase the price per square foot as well because more buyers will enter the market creating more multiple bids which ultimately will increase home prices.
While lower interest rates are great, the savings do not outweigh the equity you will build by buying now. The ability to refinance if/when rates go down is great! If rates don't go down, well then you have the lowest rate you could possibly have and still get to build equity.
If you made it to the bottom of this post THANK YOU and I look forward to talking soon! Stay warm!
