"Hanover," the 42-artist group show opening today at the Osuna Gallery, 406 Seventh St. NW, though slightly incoherent, is highly reassuring. Its finest art is very fine, its worst is not so bad. Those who wish to glimpse the state of painting in this city might as well start here.

This happy, sprawling show stars a piece of real estate. Its artists all are neighbors. All 42 of them now work in once decaying warehouses on a single city block between N and O streets near North Capitol Street NW. Their exhibition takes its name from Hanover Place, the far-from-handsome alley that intersects their block.

Their vivid exhibition supports the quantum theory of the history of art. Explanations vary but the evidence is plentiful: In Washington, as elsewhere, good art occurs in clumps.

No charismatic master is particularly responsible for Hanover's vivacity. No single style rules there. Its painters produce portraits, landscapes, still lifes and abstractions; its sculptors work with oak and bronze, plastic, putty, marble. Perhaps because the making of a work of art is a lonely business, artists thrive on camaraderie. A sophisticated, knowing audience also helps. Those who work at Hanover have both in abundance. They nourish one another with gossip and affection, consolation, confidence, laughter and advice. There is something going on there. Art is in the air.

Osuna's exhibition puts its best foot forward. It opens with a bang, with large impressive canvases by Stanley Sporny (a landscape of Los Angeles full of smog and swimming pools done in creamy paint), a Robert McCurdy portrait (of the artist's wife), a colorful abstraction painted by Keith Morrison, a construction of small doorways made by Charlie Sleichter, a trompe l'oeil drawing by Greg Hannan, and a pair of big abstractions (one by Patrice Kehoe, the other by her husband, W.C. Richardson) that are among the strongest objects on display. Despite additional impressive works, some of them amusing (Henry Leo Schoebel's, Suzanne Codi's, Judy Miller's) and some of them severe (John Van Alstine's), such quality is not everywhere maintained. Though the exhibition ends with a handsome and successful Walter Kravitz installation, its densely crowded back wall is something of a botch. Still, the good on view far outweighs the bad. The best artists at Hanover are among the best in town.

The blossoming one senses there suggests a set of precedents. Good artists in this city have formed groups before. The school that Duncan Phillips opened long ago in the gallery he founded was perhaps the first. Many painters trained there moved on to the art department at American University, which was perhaps the second. The Washington Workshop Center founded by Leon and Ida Berkowitz (where the late Morris Louis became friends with Kenneth Noland, and where Color Painting blossomed) also left its mark. So, later, did the works produced by faculty and students at the Corcoran School of Art and at Howard University.

Ten years ago this month, dealer Ramon Osuna, who in those days ran the Pyramid on P Street, organized another geographical exhibit starring all the artists -- Yuri Schwebler, Jonathan Meader, Gay Glading, Manon Cleary, Rebecca Davenport, Alan Bridge and Allen Appel and half a dozen others -- who in those days lived and worked in the Columbia Road apartment building called the Beverly Court. They, too, followed many paths, but seemed to thrive in company. The Hanover exhibit calls their show to mind.

Other nodal artists' groupings here no doubt deserve mention -- among them the Torpedo Factory, Zenith Square, and the downtown studios -- but few of them could generate a show as strong and pleasing as the one now on view.

It came about by accident. Four men get the credit. They are Eric Rudd, the painter; Robert Lennon, the developer; art dealer Osuna and artist Charlie Sleichter. Rudd, a painter and real estate developer, led the move to Hanover when he bought 52 O St. in 1978. (By the way, his grid painting on view is as calm a work as he has shown in years.) Lennon and Osuna, in partnership, following Rudd's lead, soon bought 60 O St.; 57 N St. was acquired not long after. Then Sleichter, who moved in early on, went to work inviting many friends to rent inexpensive space in Lennon's warehouse buildings. Sleichter's taste, and friendships, hum throughout this show.

Hanover is blessed with such sophisticated painters as Kehoe, Richardson, Morrison and Hannan. Other artists there -- Sleichter, Kravitz, Miller, Schoebel, Betsy Falk, Steven Cushner, Giorgio Furioso -- though they work in three dimensions, seem to think in two. Painting pure, and not so pure, does well in this exhibit. Many of these artists teach at local universities; more than half of all those showing have graduate degrees. Oddly, perhaps not so oddly, there are only two who are natives of Washington. This show of young professionals is a visual document sure to be remembered. One wishes there were more such centers in this city. Hanover is healthy. We will here more of its artists in the years to come. The show closes on March 5.