By Jane Smiley

Knopf. 417 pp. $26

When you see that this story takes place in 1982 and that a not-quite-major but not-quite-peripheral character in it is a savings-and-loan institution, you understand that Good Faith is a political novel. But Jane Smiley, a Pulitzer Prize-winner for an earlier novel, A Thousand Acres, is better than that. Polemicists write about politics; novelists write about people.

The main character and narrator of Good Faith is Joe Stratford, usually called Joey, a benign but telling reduction of the man. He's 40, divorced, living alone in a condo he fatalistically acknowledges isn't much of a place to come home to, and he's a successful real estate agent. He lives in an area of small towns two hours southwest of New York City, not yet caught up in the second-home craze, and at the beginning, Joey and his friends are all just easing along through a modest and comfortable life. I can't exactly say that ever changes, from the first word of the book to the last, and yet the suspense Smiley generates by adding just one new face to the mix -- Marcus Burns, a former IRS agent, currently an investment counselor, smooth and persuasive -- is about on a par with a hundred Stephen King creatures coming out of the woods.

I admire this novel in so many ways I hardly know where to start. Let's start small, with a detail of genius. In every novel, there are descriptions of locations, rooms, houses, neighborhoods. In Good Faith those descriptions are made by our narrator, and they are a real estate agent's descriptions. There's just something subtly professional about them, brisk, informative and specific. In all cross-gender novels, whether a man is speaking as a woman or a woman as a man, the question is always, Does he/she bring it off? Do you believe, do you forget? Well, yes, Smiley wouldn't do it if she couldn't do it, but what impressed me more than the easy skill with which she spoke as a man with buddies and a family and a local bar and a fairly active sex life was her ability to convince me from the get-go that Joey was in fact a real estate agent.

The characters around Joey are a lovely array of individuals, not types. The two builders he most often works with are, in their separate ways, both tangy delights. One of them, Gottfried Nuelle, is a cranky artist, who builds homes one at a time, lately with a young artisan in wood named Dale. Gottfried loves his houses and always gets mad at the buyers, convinced they're going to do terrible things to his creations. He gleefully tells Joey that Frank Lloyd Wright designed chairs for his houses that were uncomfortable to sit in because he didn't want people cluttering up his work. It would be fair to say that Wright is Gottfried's ideal, though I don't believe Wright ever threw anything at a customer.

The other builder is Gordon Baldwin, who knows exactly how to build a development that will sell to this kind of purchaser for that level of price, and his success has left him a happy man, with four surviving adult children. His daughter Sally had been Joey's girlfriend in high school, exactly the kind of bossy girl he needed to keep him from drifting, but she was killed in a car crash her first year of college. Joey kept close to the family, finally found another bossy woman, Sherry, to marry him, and didn't much mind when Sherry grew tired of operating him and left.

It sounds odd to say that someone's inertia is the propulsive force in a novel, but in Good Faith it is. Joey needs somebody to direct him, and here comes Marcus. Unfortunately, his counsel is not quite as reliable as the women's had been.

This is truly a novel about real estate and its meanings, and about the speculations that grew up like mold from the unregulated S&Ls, but it is also a story about life in a small town, where everything is known and nothing is harmed and you trust your neighbor because he's your neighbor. That the small town is two hours from New York gives it a little extra zing. The people are sharp, but not too sharp, and the novel happens to them while they're thinking about other things.

I can't tell you the plot. Joey starts an affair with dead Sally's married sister Felicity; or, that is, Joey being Joey, Felicity starts the affair. When that goes nowhere, several people get together to fix him up with Susan Webster, a divorce{acute}e back from several years of married life in Spain. That's pleasant, too. Meanwhile, Marcus Burns is ever deeper into the community, smiling, making friends, making deals, telling Joey what to do next. . . .

The Penguin short biography series chose Jane Smiley to do Charles Dickens, and they were right. She is one of our most Dickensian novelists, by which I mean her imagination is prodigious, her observations exact, and the wealth of fascinating people inside her head a national treasure. In the past, she has observed her people at the racetrack, on the college campus, on the farm and in Greenland long long ago, among other places, and wherever she goes you'll want to go with her. This time, it's a small town in the mid-Atlantic states with a savings-and-loan in 1982, and you want to be there. Trust me on this. Check out the kitchen, take a look at the closets. Believe me, it's you. *

Donald E. Westlake, a novelist and screenwriter, has a new book published this month, "Money for Nothing."