"You've got to be shrewd, dumb or crazy to open an antique shop," laughed Frank Shaw, mayor of New Market, Md., a sleepy Frederick County hamlet that contains 358 residents and 44 antique shops.

Shaw didn't bother to say which category he fits. The mayor and his wife, Shirley, have operated a shop for 20 years. And like the rest of the shopowners in town, Shaw has made a comfortable living by selling antiques.

New Market, about 46 miles northeast of Washington, has become a major magnet for antique hunters - dealers and collectors. At a time when the antique trade has become big business, the half-mile stretch of the town's Main Street is crowded with shoppers every weekend, looking for a "find" in perhaps an 18th-century item or a sturdy piece of late 19th-century oak.

The town's reputation has attracted new dealers. Since, 1963, when the town had only 20 shops, 24 stores have opened, many in the last seven years. What's the reason for the boom in New Market?

"People saw a good thing and got in, on it," explains 74-year-old Stoll Kemp, who opened the first antique shop here in 1936. "For a long time there were only about five shops here. Then things caught on. More and more people wanted to buy antiques."

They've caught on so much that homeowners are asking - and sometimes getting - Georgetown type prices for their properties. Houses that sold for less than $15,000 15 years ago are now going for $100,000 or more. One homeowner reportedly got $200,000 for his house recently and moved to Frederick, where he opened another shop.

Much of New Market's charm is in its history. Incorporated in 1793, the town was first a stop for settlers going to Cumberland or points farther west. Also, herds of turkeys were driven through the town's main street on their way to market in Baltimore. In the early 19th century, the town had eight hotels and a host of taverns dotting Main Street.

The lure of New Market's unbustling, small-town atmosphere attracted retirees like former FBI agent Don Morley and his wife, Nancy, and young couples such as Lee and Neil Heflin, while at the same time retaining many lifetime residents.

Henry Shotwell, 61, a retired architect, bought property here in 1969 after leaving a Washington firm (he also had practiced in New York City and Minnesota).

An antique collector since he was about 11, Shotwell prides himself on not selling anything made after the Industrial Revolution (about 1833-1848).

"It's my feeling that it's not antique unless it was made before 1830," says Shotwell, tall, slender, bald and bearded like a 19th-century seaman.

Shotwell keeps the door to his shop locked. Not everyone, he reasons, is interested in 18th-century or mid-19th-century items such as $2,000 chests or $3,000 tables, and he doesn't want gawkers strolling through on a curiosity tour. When the doorbell rings, he greets prospective customers by asking where their interests lie.

His passion for antiques may be ancestor worship, in part. The first Shotwell came to New Jersey from Leicestershire County, England in 1643. He's a descendant of Gen. Richard Montgomery, the Revolutionary War hero for whom Montgomery County is named.

While Shotwell studiously eschews anything but what he calls "period country," his 28-year-old friend, Thomas Thomas, sells mostly late 19th-century oak.

"It's not really antique," says Thomas in jagged, staccato rhythms. "It's just good used furniture. It's not handmade. And most of it was made between 1890 and 1930. Most of my customers are young - 18 to 35."

About that time a middle-aged woman walked up and sighed that she was visiting New Market on a bus tour. "I live on the Eastern Shore and I sure would like to take a couple of these chairs (sitting-room oak) home with me."

Thomas is representative of the young antique dealers in New Market in the fulltime work he devotes to his shop. But he's unrepresentative in the way he acquired the shop.

His father brought the building for $110,000 and Thomas, who started selling antiques five years ago, used his savings to purchase stock.

Like most other people in New Market, Thomas and his wife, a house trainer, live in the residential part of their shop (a town ordinance stipulates that shopowners must live themselves or have someone living in 25 per cent of the structure housing the shop).

Another young newcomer is Christopher Michon, whose fulltime job is producing for NBC Nightly News. In his shop, he specializes in American, English and continental pewter. A collector as well as a dealer, Michon laments, "I've sold things I wish I hadn't let go."

Despite the influx of new people, New Market remains a balance of old and new.

Paul Zimmerman, 68, whose great great grandfather was born here in 1817, says he notices no big change in the town's life style.

The town fathers make sure there are no radical changes by keeping close watch over zoning regulations. The half-mile stretch of Main Street has been declared a historic district and can't be tampered with unless permission is granted.

Mayor Shaw recalls that C&P Telephone wanted to install a relay station in a modern building. The city fathers vetoed the idea. The utility company came back and successfully got through a building with a colonial facade that blends in handsomely with the rest of the town's 18th-century style.

"We don't want to grow," chuckles Shaw. "Our size is part of our charm."

New Market recently put on a weekend festival celebrating its link with the past. Craftsmen of many types - broommakers, dollmakers, wood carvers and apple-butter makers - demonstrated their skills.

"We used to put this on every year," observes Shaw, "but it got out of hand. The town got too crowded with tourists. We just started it again about three years ago."

Part of the charm of every small town is a town character. B.E. Sullivan may get the nod in New Market.

No dealer comes close to him for collecting a variety of odd items. In a large warehouse behind his shop he has stored a hearse from the 1890s, a firehose cart from about 1840, early farm tools, a buffalo head an Algonguin chief gave him, a foot-powered table saw, a foot-pedal printing press, the original Elsa the Cow from the 1833 World's Fair and hundreds of other valuables.

Rawboned, squinting and talking in a mixture of Midwestern and Upper South accents. Sullivan says, "I can't pass up a sale. I used to be a Hoover vacuum cleaner salesman, and a while back I came across some old Hoovers. I had to buy them. I just like old things.

"If shopowners around here don't have what customers want, they send them to me. We've got a little bit of everything here."

Almost everyone in New Market is optmistic about the town's future - even those who're selling their homes at record prices.

Stoll kemp, who was 36 when he opened the first shop here in 1936, says, "I've raised two daughters by selling antiques and I suppose I'll go on a little longer."

How long?

"As long as I can navigate."