Alexandria home prices forecast to rise fastest in Northern Virginia next year
Industry projects 4.2% increase for single-family homes as city manager reports growing financial strain among residents
Alexandria home prices are expected to climb faster than anywhere else in Northern Virginia next year, according to a new industry forecast, even as city officials report growing signs of economic strain among residents.
The median price of single-family homes in Alexandria is projected to rise 4.2 percent in 2026, the highest increase among the six Northern Virginia jurisdictions examined in a housing forecast released Wednesday by the Northern Virginia Association of Realtors and George Mason University’s Center for Regional Analysis. Townhome prices are expected to increase by 2.5 percent, and condo prices by 1.1 percent.
The forecast points to mortgage rates hovering around 6 percent, rising inventory, and what NVAR CEO Ryan McLaughlin called “a more stable phase” for the regional market after years of volatility.
But the optimistic outlook stands in contrast to a more sobering picture presented by City Manager James Parajon to the City Council on Dec. 10. Parajon reported that Northern Virginia lost 6,600 federal jobs and 10,300 professional and business services positions over the past year — losses he said are contributing to financial stress across the city.
“There’s a pretty high level of stress that is occurring,” Parajon told the council.
The number of Alexandria residents seeking payment plans for their car taxes jumped 34 percent in roughly a month, rising from 71 plans in early November to 95 by Parajon’s December update. The city has also established 12 real estate tax payment plans averaging about $4,189 each.
The housing market data shows mixed signals. Sales in October rose nearly 11 percent compared to a year ago, and active listings jumped 51 percent to 367 homes. But homes are selling for less than the asking price — 97.9 percent of the list price compared to 99.4 percent a year ago — and taking longer to sell, with average days on market climbing to 26 from 19.
“I think some of that is related to the loss of federal employment,” Parajon said.
The NVAR forecast acknowledged uncertainty from the recent federal government shutdown but emphasized the region’s underlying strengths.
“Northern Virginia’s housing market stands out in its resilience,” said Terry Clower, director of GMU’s Center for Regional Analysis.
Budget Director Morgan Rout offered a less rosy assessment at the Dec. 10 council meeting, warning that the city’s revenue outlook is “extremely weak for the foreseeable future.” More than 60 percent of Alexandria’s operational revenue comes from property taxes, with roughly 80 percent of that from residential properties.
About 26,000 Alexandria households — approximately 35 percent of the city’s total — are considered housing cost-burdened, according to Parajon.
Residents affected by federal workforce changes who need help with tax obligations can contact the city at FedImpact-AlexTax@alexandriava.gov.
