Can You Trust Home Value Estimates from ZTR?

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Sometimes both Buyers and Sellers rely on the ZTRs (Zillow, Trulia, Realtor.com and others) to estimate [Zestimates for Zillow] the value of homes.

These estimates may be entirely unreliable.

Here are some of the reasons theZTR blanket estimates do not work well in Prescott, Arizona.

  • Many lots were sold to individual Builders
  • There are very few “look-alike” homes here
  • No “cookie-cutter” or “ticky-tack” homes here
  • Forest settings vary widely from one part of town to another
  • Prescott is hilly and some of the lots are steep
  • Some have big views, others do not
  • Ages of the homes vary widely, a few are as old as 100 years or more
  • Homes in the pines are mostly 30 to 50 years old
  • Many homes have been remodeled or updated

Questions you should ask when shopping for a home in Prescott

  • How steep is the lot? – there are very few nearly level lots
  • How many stair steps to get to the main living level?
  • How many levels in the home?
  • How steep is the driveway and how long is it?
  • Does the driveway face north or south?
  • Do you want to live in the pines?

If you come from Phoenix or other area where there is no snow, you probably would not think a north-facing driveway versus a south-facing driveway is significant. However, it does make a huge difference when there is snow on a steep driveway. The last home I had in the pines had a steep driveway and faced to the north. What little snow we get in Prescott usually melts in a day or two but not so on a driveway that is shaded in the winter.

Just a cursory analysis shows that there may be a $50,000 to $60,000 premium for a 2,000 sq-ft home in the Ponderosa Pines compared to a home that is not in a “piney” area. Doing meaningful CMAs in Prescott is very difficult. I do not routinely do CMAs as it is so difficult to account for or adjust for the factors mentioned above.

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