Real Property Assessment Information
For CY 2009, the overall assessed value of real property, including both locally assessed real property and state assessed public service corporation properties decreased 2.06 %. New construction activity added $268.4 million for CY 2009 which partially offset the decrease in the total tax base. The primary reason for the decrease in the overall CY 2009 assessments continues to be the ongoing market struggles in the residential sector during 2008.
Changes in the Residential Real Property Tax BaseThe overall value of the City’s residential real property tax base decreased in CY 2009 by 4.39%, or $883.7 million, from $20.1 billion in CY 2008 to $19.3 billion in CY 2009. Overall, residential depreciation totaled $948 million, or a decrease of 4.7%. The depreciation was partially offset by residential new construction which added $64.5 million, or 0.32%, to the base, which is approximately half the amount of new construction added during 2007 for the 2008 assessments.
The average assessed value for an existing residential home (single-family and residential condominiums) decreased 4.75%, from $500,234 in 2008 to $476,490 in 2009.
- The average assessed value for a residential single-family home as of January 1, 2009, is $637,154. This is a decrease of $22,836 or, 3.46% from the previous year.
- The average assessed value for an existing residential condominium as of January 1, 2009, is $301,718. This is a decrease of $24,711 or, 7.57%, from 2008.
Single-family and condominium markets remain in transition. The Washington Business Journal recently asked three experts what to expect in 2009 and received three different answers. The market, while potentially “firming up” for close in locations, will remain volatile due to overpriced housing relative to incomes, and the potential for more foreclosures.
Changes in the Commercial Real Property Tax BaseThe overall value of the City’s commercial real property tax base increased in 2009 by 1.24%, or $175.1 million. New construction accounted for $203.96 million of this increase, which was partially negated by the loss in commercial value of $28.8 million. Existing commercial properties, including multifamily rental decreased .2% on average for 2009. There were variations in appreciation and actual value declines for existing commercial properties depending on their particular market sector. Increases are reported for very few commercial properties and were primarily property specific depending on the actual income and expense history for a specific property or small group of properties. The value of new construction decreased 26.2% from $276.17 million in 2008 to $203.96 million in 2009.
The first cracks in the commercial market were exposed during 2008. Continued difficulties in the credit market in 2009 will result in lower rental rates, higher vacancy, and lower market values. Expect capitalization rates across all commercial sectors to increase as the market re-prices risk and demands greater equity positions from investors. Increasingly likely, higher capitalization rates during 2009 will probably result in a drop in the City’s commercial tax base to be reflected in 2010 assessments.
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