It's not exactly the best time for celebration in Washington's real estate business.

But history is time and cannot be stopped. There's no way to hide the fact that the area's largest real estate firm, Shannon & Luchs, passed an important milestone yesterday on the occasion of its 75th anniversary.

Although area housing sales have picked up a bit in recent weeks, the persistence of mortgage rates at the discouraging level of 15 percent or more is keeping many potential buyers away from the Sunday open houses. Some real estate firms and mortgage bankers have merged or cut back operations sharply.

This has not been the case at Shannon & Luchs, which completed a record year in 1980, even as new competition was established by real estate firms not based in Washington but anxious to have a part of the normally booming market here.

Although no galas are planned, President Foster Shannon is happy to recount his company's traditions and history. And he is convinced that real estate remains a cyclical business -- which means that a rebound from the current economic depths can't be far in the future.

"Every three to five years we have a period of adjustment," Shannon said recently. "When this occurs, we hear the forecasters of doom say, 'Don't buy real estate.' Every time they've been wrong."

Shannon's own outlook has been molded from his experience at Shannon & Luchs since the 1940s, where he started work after World War II as a hod carrier on a construction site. The company's vice president, Kenneth Luchs, started as a switchboard operator before being promoted to parking cars.

Their company has sold more houses in the Washington area than any other, with an annual volume of business handled that now exceeds $1 billion.

The District-based firm was started in 1906, after a chance meeting at a home building project. Herbert Shannon (Foster's father) was an Irish carpenter and foreman on the job when real estate salesman Morton Luchs (Kenneth's grandfather) stopped by and the two men talked about Washington business.

With few doubts to deter them, the two men agreed that the capital city needed a new type of real estate operation. On a cold March 1, the first of the now-familiar green and white Shannon & Luchs signs was posted on a small store at 714 13th St. NW. Shannon planned to concentrate on building houses and Luchs would do the selling.

"The fledgling company natually took to subdivision development," Shannon said. "And during the years the company has been responsible for building many of the area's most popular section," including many homes in the Burleith, 14th Street Terrace, Chevy Chase and Rollingwood neighborhoods, he added.

When demand for houses was high and the market was tight, Shannon & Luchs simply built new homes, a solution that was possible in an era when interest rates on construction lending didn't eat up all assets.

Over the years, the scope of business under the Shannon & Luchs name has changed, along with the economic environment. In fact, Shannon says a company insistence on diversification and innovation has been one of the most important aspects of his firm's survival.

Founders Shannon and Luchs creat a full-service real estate firm, with commercial and land sales departments, rental management, an insurance department and mortgage financing. Among the more innovative projects over the years have been:

The area's first park-and-shop complex at Connecticut Avenue and Porter Street NW, an early version of shopping centers that evolved from the increased use of cars.

Capital Garage, the first multi-level parking building in D.C.

Financing the city's first medical building at 18th and I streets NW.

The first realty company to play a serious role in D.C. urban redevelopment programs.

Shannon & Luchs also has specialized iin assembling property parcels; all land in Reston was acquired in such a massive venture, for example, by the company.

Today, the firm has more than 1,200 employes in nine divisions. Shannon & Luchs is selling housing units at the rate of 5,000 a year, managing 18,000 apartments and condominium units, handling $100 million in commercial and investment sales, leasing a million square feet of office and commercial space a year and managing 30 office buildings and rental projects, an active insurance division and a computer system that processes some 750,000 transactions every 12 months.

From a headquarters in the Farragut Building, at 900 17th St. NW, Shannon & Luchs executives monitor operations at 34 offices throughout the metropolitan area. Foster Shannon's elder brother, William E. Shannon, is chairman of the company, which is owned equally by the Luchs and Shannon families.

Kenneth Luchs, son of the late Frank J. Luchs, attributes his firm's record levels of business during a period of industry recession to the average age of his managing directors -- 38. "That's why we're growing like we were born yesterday -- young, aggressive management, mostly local Washingtonians who really know the territory," he said.