Real property assessments in the City of Alexandria continue to perform similarly to those in other Northern Virginia markets. On a year-over-year basis, residential values posted an increase of 1.75%, while commercial property values during the same period increased by 2.51%. The total 2017 locally assessed real property tax base increased 2.07% from the previous year. This marks the seventh year in a row that assessed values have increased after two consecutive years of declining values in 2009 and 2010.
The Residential Market
Still improving, but moderating housing market conditions in Alexandria are due to relatively low unemployment, low interest rates, a constrained supply in combination with pent-up demand, the significant number of high paying jobs, and its prime location inside the Capital Beltway with four operating Metro stations. This optimistic outlook is tempered by the Federal Reserve’s intention to raise the discount rate in an effort to keep inflation in check. However, this policy could result in higher mortgage interest rates in 2017
- In 2017, the average equalized value of existing residential property, including single-family and condominium is $528,421, an increase of 0.95% from the previous year.
- The average single-family house is assessed at $730,499, an increase of 1.26%.
- The average residential condominium is assessed at $310,990, an increase of 0.16%.
- For 2017, 33.44% of residential properties increased in value, 17.56% decreased, and 49.0% were unchanged.
The Commercial Market
Commercial assessment increases in 2017 were
primarily improvements in the general commercial and hotel sectors. On a
year-over-year basis, these two sectors increased 10.27% and 12.58%,
respectively. Of particular note, the 505-unit Park Meridian at Eisenhower
Station delivered during the 3rd quarter of 2016. As of January 1, 2017, this
25-story project is approximately 80% leased.
Significant gains were experienced in the market
for general commercial properties which on a previous years, these properties
are now attracting the interest of institutional investors. The City’s office
market is flat and continues to face challenges due to a general lack of
demand, tenant concessions, lower effective rents and continued space
compression upon renewal. Despite current market conditions, 2017
capitalization rates remained unchanged or even compressed in several
commercial sectors for Class A investment grade property in close proximity to
metro rail. Overall, the commercial property sector, excluding multifamily
rental and vacant land, increased 2.82% on a year-over-year basis in 2017.
By leveraging technological resources to gain efficiencies, the Office of Real Estate Assessments (OREA) continues to make it easier for larger commercial property owners to electronically file Income and Expense Surveys using our web-based reporting system. Instructions for utilizing the application are available on the Office’s website at www.alexandriava.gov/realestate. Income and Expense Surveys will be mailed in early February and have a filing deadline of May 1. New in 2016, and continuing in 2017, the OREA has streamlined the billing process for properties that are comprised of multiple parcels. The parent parcel, usually the one has the most value, will now reflect the total a property’s value (parent and ancillary parcels). This eliminates the need for multiple bills and reduces the cost of postage to the City. This process applies only to those properties that are comprised of multiple parcels that function interrelated as one economic unit. Previously existing accounts are maintained in the system, but have no value associated with them. No property rights are lost by the property owner. Property owners will be notified by the Office of Real Estate Assessments as new group accounts are created.