Are the New Park Avenue Townhomes Driving Up Townhome Prices in Winter Hill?
By Peng Si Highnam
Summary
For years, Cherry Hill townhomes in the Winter Hill neighborhood provided the City’s most affordable entry point into single-family homeownership. But in 2025, these townhome prices suddenly jumped by over 12%, far more than any other townhome complex. This post proposes that the reason is the influence of the new townhomes on Park Avenue that are comparable but priced over $1 million. These new townhomes, enabled by the 2023 T-zone ordinance, were supposed to increase the supply of smaller homes to improve housing affordability. Instead, they have made the entry point to single-family homeownership in Falls Church even more expensive.
Cherry Hill Townhomes, the most affordable single-family homes in the City
There are two sets of townhomes in Winter Hill. The smaller 800-900 sq ft units are actually condominiums called the Winter Hill Condominiums. The larger townhomes along W Annandale Road and Gundry Drive are known as the Cherry Hill Townhomes. There are 194 of these single-family homes built around 1978 as no-frills workforce housing. Originally built having 1,200 sq ft living area on two levels with three bedrooms, 2.5 baths and a basement, almost all have been remodeled to partially finish the basement so that they are typically 1,600 – 1,700 sq ft with two full baths and two half baths.
These Cherry Hill townhomes have been among the lowest cost single-family homes in the City. They were sought after by people looking for their first single-family home in Falls Church. They are centrally located, within walking distance of shops, supermarkets, restaurants, parks, and the library. In 2023, these townhomes were selling for $700,000 to $800,000. Other townhome complexes in the City are larger, typically 2,500+ sq ft, and were developed to target wealthier homebuyers. It was not unusual for those townhome prices to be over $1 million.
Madison Homes set new T-Zone townhome prices at $1+ million
The new townhome developments on Park Avenue were made possible by a change in the zoning ordinance, known as the T-Zone ordinance. Despite strong community criticisms, the T-Zone ordinance incorporated feedback the City solicited from developers, including Madison Homes, to ensure that there would be redevelopment on Park Avenue. When it became clear that there was no interest in building an affordable housing development on such a prime location in the City, staff planners were instructed to incorporate living area limits in the code in the hope of producing “missing middle” housing of $800,000 to $850,000 at 2023 prices. [For background, see the Pulse post A New T-Zone Code Approved (5-2) Despite Lack Of Consensus, October 1, 2023.]
Soon after the City Council approved the new T-Zone ordinance, Madison Homes submitted plans to build 12 townhomes on the corner of N Oak Street and Park Avenue (Oak Park), followed by 20 townhomes on the corner of N Lee Street and Park Avenue (Lee Park). These townhomes met every requirement of the ordinance that they had helped craft. They informed the Planning Commission that the expected Oak Park townhome price would be around $1 million. Their plans easily received approval in spring 2024, and construction began in the fall of that year.
Madison Homes received lots of interest from prospective buyers even before sales prices were announced. These townhomes had three bedrooms and three to four bathrooms totaling 1,600 to 1,900 sq ft on four levels with single garages but no basements. In early 2025, Madison Homes advertised Oak Park townhome prices between $1-1.2 million, and several contracts had been signed.
Cherry Hill homeowners raise their selling prices in response
The new Park Avenue townhomes are comparable in living area, bedrooms, and bathrooms to the Cherry Hill townhomes. There are only a handful of similar-sized units in other townhome complexes, but all 194 units in Cherry Hill are comparable. In fact, they are the only comparable townhome complex in terms of size and location.
When Madison Homes successfully signed contracts for townhomes priced at over $1 million in early 2025, Cherry Hill home sellers also raised their townhome prices so that they were more comparable to the Madison Homes townhomes. Sales prices averaged $940,000 in 2025, a jump of over 12% compared to the previous year. One well-remodeled townhome even sold for over $1 million. No other townhome complex saw such a large increase in sales prices.
The actual sales prices of the new Oak Park townhomes were only publicly known when the sales closed in December 2025 and early 2026. They averaged over $1.3 million. The average Cherry Hill townhome price has continued to climb in the first half of 2026. The chart below shows the change in the average Cherry Hill townhome price from 2023 to 2026 and the Oak Park townhome average price. The Cherry Hill townhome prices increased about 3% a year from 2021 to 2023, then 6% in 2024 before jumping 12% in 2025. These townhomes now appear comparable in price to larger townhomes in the City that used to be more expensive.
Townhome price increases are reflected in the 2026 assessments
At the beginning of each year, the City’s Real Estate Assessor determines new assessment values for all properties in the City by considering the sales prices in each neighborhood in 2025. Virginia law requires properties to be assessed at “fair market value”. (The 2026 assessment analysis can be found in the Pulse post A City-wide Analysis of 2026 Real Estate Assessment Increase Shows Who is Paying for the FY2027 Real Estate Tax Increase, April 26, 2026.)
The increased townhome prices at Cherry Hill in 2025 resulted in an average 13% increase in assessments for 2026 for all Cherry Hill townhomes. The chart below shows the change in real estate assessments from 2025 to 2026 for all townhome complexes in the City. The phenomenal increase in assessments for Cherry Hill townhome stands in stark contrast to the other townhome complexes. These assessments show that the townhome price increases were particular to Cherry Hill.
The table below shows the average assessment for the townhomes in each townhome complex in the City in 2025 and 2026. Despite the 13% increase in valuation, the Cherry Hill townhomes appear to be about $100,000 below their market value. The gaps between Cherry Hill and the townhomes on Rosemary Court, Ellison Square, and Flagmaker are also closing. The latter three complexes are situated on the south side of the City near Route 29.
| Average Real Estate Assessment | ||
| Townhome Complex | 2025 | 2026 |
| Cherry Hill | $758,182 | $857,178 |
| Rosemary Court | $843,286 | $894,657 |
| Ellison Square | $846,082 | $895,564 |
| Flagmaker | $938,175 | $897,838 |
| Whittier Park TH | $1,011,745 | $1,046,003 |
| Steeples Court | $1,013,225 | $1,072,405 |
| Rosewood | $1,104,567 | $1,089,378 |
| Wren’s Way | $1,046,333 | $1,092,689 |
| James Thurber | $1,063,361 | $1,100,314 |
| Governor’s Sq | $1,067,761 | $1,115,096 |
| Tollgate Way | $1,109,283 | $1,159,017 |
| Rees Place | $1,168,494 | $1,166,603 |
| Bishops Court | $1,121,233 | $1,182,083 |
| Loundsbury Place | $1,182,625 | $1,205,000 |
| Gresham Place | $1,397,036 | $1,419,912 |
| Park/Penn Ave | $1,428,500 | $1,450,229 |
| Riley (Park Ave) | $1,486,050 | $1,510,392 |
More expensive housing – an unintended consequence of the T-Zone ordinance
When former Mayor David Tarter joined Council Member David Snyder in voting against the T-Zone ordinance, he warned of unintended consequences and the difficulties of trying to produce desired housing through zoning ordinances rather than direct negotiations via “Special Exception”. The new T-Zone ordinance is now on track to produce 47 new townhomes on Park Avenue that are comparable to Cherry Hill but at a much higher price.
Should the City have expected that the new housing would cause comparable lower priced housing to rise? This phenomenon is not unique to Falls Church. It has been studied and well-documented. For example, “The effect of new residential construction on housing prices” by Velma Zahiro-Herbert and Karen Gibler, Journal of Housing Economics, Volume 26, December 2014, found that in dense urban areas, new residential construction pulled up the prices of comparable lower priced properties. The City’s urban planners should have been aware of the potential impact of the T-Zone ordinance on Cherry Hill.
Madison Homes’ Lee Park townhomes are priced up to $1.8 million. We can expect that these new townhomes, too, will cause prices for comparable existing homes to increase. Far from containing home prices by increasing supply, new construction in dense urban areas has the effect of raising prices and making existing comparable housing less affordable.
From homes to investment properties
The City doesn’t only need more housing that is less than $1 million, it needs those houses to be available for sale. Unfortunately, there are signs that Cherry Hill homeowners are hanging on to their properties. The higher values make it worthwhile for homeowners to invest in renovating their homes. Selling might also mean having to pay a capital gains tax.
The high property appreciation rate encourages people to retain their properties as investments when they move out. These townhomes rent for $4,000 to $5,000 a month. I recently lost a friend who owned a Cherry Hill townhome, and her children decided to rent her house out rather than sell it. Theirs was the right financial decision, but it meant one less house available for sale.
The new townhomes may have added more housing inventory to the City, but they may have resulted in fewer existing small homes being available for sale. The irony is that if the T-Zone ordinance had allowed larger townhomes such as the 3,500 sq ft Riley townhomes on Park Avenue that Madison Homes built in 2001, they would not have been comparable to Cherry Hill, and Cherry Hill townhome prices would probably have continued to appreciate at their historical 0-6% rate.
