Martha C. Brown's town house at 809 O St. NW, occupied until recently by militant housing activists protesting Brown's eviction, was bulldozed to the ground yesterday, clearing the way for commercial development of the historic O Street Market in the Shaw section of Washington.

"It took about 15 or 20 minutes to knock it down, that's all," said demolition contractor Willie Flood as he surveyed the rubble-strewn field where the house had stood.

The Brown property is the last to be acquired by the city's urban renewal agency for development of a $5 million, two-block shopping complex in the 7th Street corridor - the first since the 1968 riots. The city offered Brown $14,000 for the property in 1975, plus up to $15,000 in relocation expenses, but when U.S. marshals moved to evict her last month, she balked.

Activists from the Citywide Housing Coalition occupied the white brick town house while Brown's attorney. Harry T. Alexander, obtained an agreement with city housing officials to delay demolition of her houe at least to July 31. Meanwhile, Alexander filed a court challenge of the $14,000 purchase offer, contending it is below fair market value.

With the July 31 deadline passed, U.S. marshals arrived again yesterday at about 7 a.m. to remove Brown's furnishings and ready the building for demolition.

Brown was not there, but her brother, Alfred, 55, a one-legged war veteran, along with his wheel chairborne wife, apparently had spent the night in the house and were ordered out by the marshals.

A contingent of D.C. police officers also was on hand to head off any disruptive action by housing activists, but none of them showed up until after the demolition process had started. They quietly watched the demolition, and there were no arrests, according to witnesses at the scene.

Asked if the early morning demolition was planned to avoid the activists, Flood said, "That was the general idea."

Martha Brown, 60, a retired D.C. government nurse, had not been living at the house since she was initially evicted July 14. But 50 to 100 activists from the housing coalition continued to occupy the building periodically, citing it as an example of what they say are the ruthless eviction practices of the city housing department and its policy of forcing slum-dwellers to sell their homes below fair market value.

Under questioning by a reporter two weeks ago, Brown acknowledged she owns a second house at nearby 509 P St. NW and acquired still another house in June for $22,000 at 407 O St. NW. She acknowledged the recently porchased O Street house is listed in her name but said teh $10,000 down payment on it was provided by an ailing uncle who will occupy it.

Also, court records show that the city began negotiating to acquire Brown's house at 809 O St. more than four years ago for the O Street Market development and that Brown agreed in 1975 to a sales prive of $14,000.

In addition, according to court records, a city housing department relocation counselor assigned to help Brown acquire a new home found Brown to be "extremely uncooperative" and unwilling to accept several alternative homes.

Alexander said yesterday Brown recently located a desirable home for $47,500 in the 500 block of U Street NW, "and I have advised her to enter into a contract to buy it."

Brown has up to $29,000 in city funds to buy the new house - $14,000 from the demolished O Street house and $15,000 in relocation expenses - but Alexander contends she should receive an additional $8,000 for the fair market value of the O Street house. His motion for a jury on this issue is pending before U.S. District Court Judge Aubrey E. Robinson Jr.