They say that Upper Marlboro's courthouse, the congested but forever sleepy crossroads of Prince George's County law and politics, has never seen anything like it, before or since.

The town's one and only downtown street, Main, was jammed that late summer's morning with so many black limousines that, one lawyer remembers, "we all thought it was a Mafia funeral." Inside the courtroom of Judge Charles C. Marbury, hundreds stared and gasped as sealed bids were opened in the sale of the 2,226-acre Belair estate of millionaire William Woodward, who has been shot and killed by his wife - accidentally, the coroner said - at their Long Island mansion.

It was Aug. 27 1957 the day that builder William J. Levitt came into town in one of those limousines and, with a check for $1,750,000, bought the Woodward estate and determined the future of Prince George's County housing.

Early this month, in another ceremony so inconspicious that two weeks passed before a local paper learned of it, the era that, the courthouse criticism went "began with a shotgun in Long Island" ended when William Levitt's old company, long since under different ownership, surrendered its building license to county officials.

The Levitt Housing Corp. agreed to give up its right to work in Prince George's after building inspectors cited more than 2,500 code violations in the 122 homes of Levitt's Northview subdivision, opened in 1976.

Ironically, the company's last, embattled project is adjacent to the community that, 17 years ago, sprouted seemingly overnight from the old Woodward estate under Levitt's guidance: Belair-Bowie.

The contrast between the two communities - and the stories of their respective residents - encapsulizes the rise and downfall of the county's most influential developer.

Two changes of ownership, a court ordered trusteeship and countless tournovers of management separate the Levitt and Sons Inc. of Belair-Bowie from the Levitt Housing Corporation of Northview. But to many observers of the nationally based developer, only one crucial factor made the difference between the phenomenally successful company of the 1960's and the one that lost its building license this month: the presence of William J. Levitt, who sold out of the business in 1968.

Levitt, the company's founder and developer of the mass-produced middle class slab house, is still described in terms befitting a saint by Bowie residents and county officials, even those who years ago fought him over unpaved streets, indiscreetly placed gas stations and sagging walls in boomtown Bowie.

"He's clearly a genius, a creator, a Michaelangelo of real estate," said Lewis Cassidy, an original resident of Belair. "He could charm the birds out of the trees," said Edward T. Conroy, a state senator and another charter owner in Belair.

"What really makes us mad," said County Councilman Francis B. Francois, a third Belair original "is that people confuse the current Levitt with old company, with Bill Levitt. It's like comparing Chanel No. 5 with Aunt Minnie's Rosewater."

When the residents of the Northview Homeowners' Association recount the miseries of living what they say are sloppily constructed houses, their voices harden with bitterness. But when old members of the Bowie Citizens' Association remember their first year in Levitt houses, their tales of countless squabbles and indignities are touched with a palpable nostalgia.

The first 600 of Levitt's 10,000 homes in Belair-Bowie opened in October 1961, dubbed by suspicious outsiders as "the instant slum." In his hast to sign the houses away, Levitt let hundreds of deficiencies slip by.

"We moved in in mud, because no grass had been planted," remembers Francois. "The streets were awful and he had to lay plywood boards over our lot to make a sidewalk.

"The codes were not well enforced then," Francois said, "and Levitt had a lot of pick-up-off-the-street laborers. The homes looked it - some of them had plumbing installed without joints, and the place would be flooed the first time anyone took shower."

"At the end of the first year, the production hadn't been as far as Levitt had committed himself to and we had to move lots of people in quick," remembers Ken Adelberg, who was Levitt's executive engineer in the area. "We had to go back and make one hell of a lot of repairs."

What apparently endeared Levitt to the community was his determination to treat his customers fairly. After the first residents were settled in Bowie, Levitt allocated $500 per home for repairs, and no code violation was neglected.

After its first, rocky year in Prince George's had passed, Levitt & Sons quickly developed a reputation for selling well-built, relatively inexpensive houses that were personally watched over by the giant corporation's president.

The company also rid itself of a semiofficial antiblack policy it maintained in Bowie during its sales. By 1964, Levitt was advertising his homes as open to all races, and black families were living in new Bowie houses.

The community remained mostly white, mostly upper-middle class and well-educated, however, Community activism, even now, is still high, after organizing their churches and fighting for their roads and public schools, Bowie citizens are highly possessive of their well-manovered patches of suburban security and take a strong interest in local problems.

A three-bedroom Levitt colonial home in Bowie with air conditioning, a dishwater, a large lot and Levitt's distinctive landscapping sold in the early 1960s for $13,510. Now, according to the Convoy, those omes are worth $50,000 to $70,000.

Other builders in the county began to follow Levitt's lead. "Modern Construction company - which was building New Carrollta at the time - was the other bigh builder, and they switched from their plaster walls and slate roofs to the dry walls and the composition roofs that Levitt used, said Paul Fowler of the Prince George's County Builders Assn. "Everybody was trying to be competitive with Levitt."

Levitt & Sons' dominance in the county grew as the company opened Mempelier in the Laurel area during 1966. The wrecked the community opened, 21,000 persons swarmed over the site with deposits in hand.

There were bad effects of Levitt's dominance, thought. "What unfortunately happened is that a lot of imitators from all over the country came in after Levitt and built a lot of gardens," said John Cassidy, a veteran attorney in Prince George's. "Now, 10 years later, we're stuck with it."

The company's fortunes began to plummet with amazing rapidity soon after Levitt sold his company to International Telephone & Telegraph Co. in 1968 for $2 million in stock.

Some observers say Levitt saw a change in the market before anyone else and bailed out early. Others blame ITT's practice of selling off Levitt & Sons' land assets for the company's decline.But the most persuasive view of what happened to the once-great builder under ITT is that of Adelperz who left the company before the sale to become a private home inspector.

"ITT didn't give its field managers any latitude," he expalined. "Anytime a decision had to bemade about $100 in a customer's bill they had to go to the top executives, who were out playing golf."

Under William Levitt it had been different."When I joined it was like an incestnous family," Adelberg said.

"Levitt used to like to bring his laborers up through the system and make thm his top executives. He treated them well and gave them room, and they did a great job for him."

Levitt & Sons lost $400 million for ITT between 1968 and 1975. By 1971, ITT was happy to sign a consent decree under which it divested itself of the housing company.

Between 1971 and 1975, ITT could not find a buyer for Levitt, and the company foundered further. Finally, last April, Levitt was acquired by the Starrett Corp. of Greenwich, Conn., and became Levitt Housing Corp. Since then, observers say, fortunes of the builders have improved.

But it is already too late for Prince George's County.

After the troubles of recent years, local officials and builders were not sorry to see the present Levitt company leave.

But the hearts and minds of Bowie are still with William J. Levitt. "He's started a new corporation to build senior citizen homes in Florida," said Francois. "And a lot of people from Bowie are already trying to sign up." CAPTION: Picture 1, Builder William J. Levitt explains to a news conference on July 7, 1960, his plans for developing Belair-Bowie.; Picture 2, Aerial view of the Northview subdivision where building inspectors cited 2,500 violations., By Ken Fell - The Washington Post; Picture 3, Lawrence J. Hogan says public employe unions need right to building arbitration., By Gerald Martineau - The Washington Post; Picture 4, Homes like these that Levitt & Sons built in the 1960's for $13,500 are now worth $50,000 to $70,000. By Margaret Thomas - The Washington Post