Real Property Assessment Information
The overall value of Alexandria’s taxable property increased 3.81% compared to January 2022, although each individual property’s value may have increased, decreased or remained unchanged. The equalized tax base increased by approximately $2.17 billion, including $1.59 billion in appreciation of existing properties and $577.88 million in new development and construction.
Year-over-year, average residential values increased 5.02%, while commercial assessments increased 1.97%. The overall increase marks the continued improvement in the residential market and substantial growth in the multi-family sectors that began in 2020 and delivered in 2022.
The Residential Market
Despite actions by the Federal Reserve to curb rampant inflation through incremental hikes of the overnight lending rate between member banks, the residential market was resilient throughout 2022 which saw mortgage interest rates double. Predictions that the residential real property market would plummet never materialized. Job growth remained strong and the available supply of for sale housing remained low. Average days on the market increased and bidding wars waned. Those homes that did sell typically transferred with assessment to value (sales price) ratios below 100%, which provided the justification for the increases reported as of January 1, 2023. Homes were still increasing value, but at rates lower than those witnessed the previous two years. The City of Alexandria continues to be a is a desirable place to live and work with low unemployment, a significant number of high paying jobs, and its prime location inside the Capital Beltway with four Metro stations and a fifth expected to open in May 2023 at National Landing.
• For CY 2023, 80% of residential properties increased, 3.5% decreased, and 16.5% were unchanged. Most properties increased 0 to 10.00%.
• As of January 1, 2023, the average equalized value of existing residential property, including single-family and condominium was $679,914, an increase of 4.26% from the average equalized value of $652,130 in CY 2022.
• The average single-family house for CY 2023 is assessed at $940,375, an increase of 4.58% from the average equalized single-family value of $899,205 the previous year.
• The average CY 2023 residential condominium is assessed at $407,616, an increase of 3.48% from the average equalized condominium value of $393,891 the previous year.
The Commercial Market
Construction of multi-family rental properties and two new hotels combined to account for 95.04% of new growth in the commercial sector and 52.93% of all new growth citywide. The hospitality sector saw increases in both the average daily room rates and occupancy which produced higher income, but recovery in the business travel sector remained elusive, and higher operating costs due to inflation have impacted net operating profits. Nevertheless, hospitality accounted for $9,567,320 in appreciation. Multifamily values have previously been discussed, but new growth accounted for 60.0% of the multifamily value increase. Rent increases are slowing and operating expenses are increasing. Overall vacancy remains low on average and capitalization rates in 2022 failed to increase as expected, either anecdotally or from actual sales. Industrial and self-storage properties increased 4.34% year-over-year. Office property values declined by 10.01% plagued by weak demand, average vacancy in excess of 25%, and concessions that included substantial free rent and liberal tenant fit-up costs. Teleworking in one form or another is here to stay which acts to suppresses demand. The long-term prognosis for the office market, particularly older Class B & C inventory, is uncertain. Capitalization rates were stable for most commercial property types. The top tier investments remain multifamily rental projects, and commercial/industrial assets which provide essential everyday goods and services and are typically leased on a net basis.
The Office of Real Estate Assessments (OREA) encourages commercial property owners to file an annual Income and Expense Survey. These can be filed in writing or electronically. Instructions for completing the survey are available on the Office’s website at alexandriava.gov/realestate. The surveys will be mailed in early March and have a filing deadline of May 1. Continuing in 2023, the OREA has streamlined the billing process for properties comprised of multiple parcels but functioning as one economic unit. Here, the parent parcel reflects the total property value (including ancillary parcels). This eliminates multiple bills and reduces the cost of postage. Previously existing accounts are maintained in the system, but have no value associated with them. No property rights are lost by the owner. Property owners will be notified by the Office of Real Estate Assessments as new group accounts are created.