Arlington Assessments Reflect Still-Sizzling Market

Housing assessments in Arlington County continue to rise in 2006 -- although not quite as sharply as in past years -- according to notices that should land in taxpayers' mailboxes early next week.

The value of the average single-family house increased to $541,800, an 18.25 percent increase, compared with a 24 percent climb in 2005. Condominiums grew in value by 19 percent to $367,000, a hefty gain but significantly less than the previous year's 32 percent.

Over the past four years, residential values in Arlington have swollen by more than 80 percent. In Northern Virginia as a whole, the average assessed value of a house has doubled since 2000.

The numbers reflect a real estate market that is still hot, if not red-hot. And it means that Arlington homeowners -- the first in Northern Virginia to receive assessment notices this year -- will again face a by-now-familiar mixed blessing: increased equity and the virtual certainty of bigger tax bills.

Homeowners throughout the Washington region can expect to get similar news in the coming weeks. Housing values in some Maryland communities, including portions of Prince George's and Montgomery counties, have grown by as much as 70 percent over the past three years, according to notices residents began to receive last week.

The actual size of property tax bills will not be determined until local governments set their tax rates later this year. Officials are promising significant cuts in tax rates, but such reductions rarely offset the impact of steadily escalating housing values.

Local governments in Virginia depend heavily on real estate tax revenue. Although annual tax increases in Maryland and the District are capped by law, no such limitation exists in Virginia.

"Many of us, as much as we love to see the value of our community continue to rise, wouldn't mind a little respite for a few years," said Arlington Board member Jay Fisette (D). The board cut the tax rate by 8 cents in 2005, to 87.8 cents per $100 of assessed valuation. Fisette said the board would probably entertain another cut this year.

The largest increases in residential values occurred in the northwest part of the county, in such neighborhoods as Old Dominion, Yorktown, Rock Spring, Old Glebe, Bellevue Forest and Donaldson Run, county officials said.

The county has two programs offering tax relief for low- and middle-income homeowners. Some residents can receive $500 grants to apply to their tax bills. Last year, homeowners with incomes of $72,000 or less and assets of up to $240,000 were eligible. Criteria for 2006 have not been set.

Another program offers tax reductions to senior citizens through exemptions and deferrals.

The declining rate of increase in condominium values comes amid evidence that the regional market is softening, with the supply of new units beginning to overtake demand. According to Delta Associates, an Alexandria real estate information firm, the pace of condominium development is slowing somewhat in Northern Virginia. To spur sales, developers are waiving condominium fees and helping with closing costs, Delta reported, with some builders cutting prices by as much as $30,000.