In a sharp break from Washington's "boom town" real estate price surge of the last several years, the average sales price of homes in the District is now declining, the Washington Board of Realtors reported yesterday.

In the first half of 1979, the board said 598 homes were sold at an average price of $103,792. But since July, 352 homes sold at an average of $95,785, a drop of nearly 8 percent.

The decrease in sales prices is occurring at a time when mortgage interest rates are increasing almost daily to record-high figures of more than 13 percent and mortage money is scarce at any interest rate.

These factors have combined to make the Washington housing market more difficult for sellers than in recent memory. One result is that would-be sellers are forced to keep their homes on the market for increasingly longer times before finding purchasers.

"The true value [of homes] has changed," said James G. Banks, the Board of Realtors executive vice president. "The market is not responding to the appreciation that we had experienced earlier this year and in 1977 and 1978."

Banks said that housing prices, which often escalated monthly in the Washington area in recent years, will now increase at a much slower rate.

'We might have a net decrease in some [price] areas, particularly in the over $150,000 range," Banks said.

Several realtors, report that because of the high mortgage rates cheaper homes, generally those under $70,000, are becoming more attractive.

One indiciation of the current pricing trends is the fact that in 1978, the average sales price of District homes increased from $97,214 in the first half of the year to $99,835 in the July-to-December period. Now the current average selling price has dropped even below that of a year and a half ago.

Most Washingtonians with a stake in the local real estate market were like Capitol Hill homeowners Roger and Sandy Harrison: Their friends told them stories of selling their homes the same day they went on the trading block and reaping big profits in a spiraling market.

But now the Harrisons and some other would-be home sellers unhappily find themselves in the forefront of the latest Washington housing phenomenon: They are forced to substanially reduce their asking prices, and possibly offer financing to a buyer, in order to have a chance to sell their homes.

The Harrisons have had their three-bedrooms, Capitol Hill row house on the market -- without takers -- for five months, even though they have steadily reduced their asking price from $178,000, which they now say was too high, to $167,000, to $162,500 and finally to $159,500.

As mortgage interest rates increase sharply and the availability of housing loans diminishes, the Harrisons have sweetened their proposed deal still further. They are offering to finance a substantial portion of the sale for two years so that a buyer would have more time to find long-term financing. f

So now the Harrisons, who already have moved to Philadelphia, where Harrison works as an executive for ARA Services, a business conglomerate, peridically drive back to Washington to check on their house and any progress in finding a buyer.

"If you were trading up, you wouldn't go looking for a house right now," the 36-year-old Harrison conceded. "But I'm going to try to ride it out when times are difficult."

Still, he admits to an anxious moment or two and hopes the house will soon be sold, pessimistically noting, "Things could be worse next spring.'

The Harrisons' difficulty in finding a buyer mirrors the state of the vast real estate industry here. Depicted just last year as the "Boom Town on the Potomac," Washington is now starting to take its lumps along with the rest of the country.

The one-time optimism of real estate officials here is gone and they say that brighter days are not in immediate sight.

These officials uniformly say that new home construction in the Washington suburbs and housing renovation projects in the District will soon drop sharply as the high interest rates make the cost of doing business prohibitive for both builders and buyers.

As Oliver Carr, a large developer in the District and president of the Metropolitan Washington Board of Trade, put it, "The buyer has been all but eliminated."

Buyers and sellers are feeling the pinch brought on by the Federal Reserve Board's recent tight money policies. The problem of expensive mortgage money, as well as the scarcity of it, is exacerbated by the fact that other financing charges often add thousands of dollars to the cost of borrowing.

William B. Fitzgerald, president of Independence Federal Savings and Loan Association in the District, says that in the long run the Washington real estate market will be sound. But for the moment, he says, "The only way I'd buy is that I had a bargain price, a tremendous bargain."

With tight financing and high interest rates, it clearly is a buyer's market. Gone are the days when sellers had to fight off buyers who at times bid up selling prices in order to buy prime properties.

Foster Shannon, president of the large Shannon & Luchs realty firm, said that the prices of about 20 properties listed with the Board of Realtors' Multiple Listing Service were reduced last week in comparsion to those sought in earlier weeks.

Moreover, the gap between asking price and the actual sales price has increased from 4.45 percent in the first half of 1978 to a current 14.47 percent. Whereas a year and a half ago it took an averge of 37 days to sell a house, it now takes 47 days, the board said.

Builder David Shikles asked $250,000 in June for a row house he helped renovate at 421 First St. SE, but recently dropped the price to $235,000 when he couldn't find a buyer.

Shikles said he now realizes the price was too high, but thinks that some nearby office construction, and its corresponding noise and dirt, kept the "for Sale" sign up during the summer months.

Realty agent Dennis Flood said he wanted to experience a renovation project first-hand and now is left with an unsold row house he helped refurnish at 1219 Massachusetts Ave. SE, 12 blocks from the Capitol.

"When it's your house, you think it's worth millions," Flood said. "Even when you're in real estate you fall into that trap."

So when the house was finished last May, he asked $229,000 and said his friends laughed at the price. Four months ago he said he lowered the price to $197,500 and three weeks ago to $195,000.

Still, Flood said that no one has come to look at the house the last two Sundays, even with his offer to take back financing on the home.

Although he has $1,700 in loan, insurance and tax-carrying costs on the property each month. Flood said he thinks he might take the house off the market until early spring in hopes that interest rates might be lower by then.

Independence Federal's Fitzgerald predicted that one effect of current economic turmoil wll be that the value of Washington area properties, which often went up by 10 to 50 percent in each of the last three years, will likely increase only 5 to 10 percent in the next year.

"It's probably a healthy thing," Shannon said, "because we just can't stand to have 25 percent increases in the price of homes every year."

Herbert Aman, president of the Northern Virginia Builders Association, said that builders will make certain that buyers qualify financially to purchase a house before starting to build their new homes. In addition, he said that because higher mortgage interest rates make monthly house payments costlier, cheaper homes will be more attractive.

People moving to bigger homes "are just going to wait another six months, Aman said. "You're going to see a real slowdown in that market."

Fitzgerald said he expects housing renovation projects to be curbed by 60 percent in the city, in part because lending institutions are more reluctant to make construction loans on such projects because they are believed to be riskier financially.

"My worry," says Martin Poretsky, president of the Suburban Maryland Home Bulders Association, 'is how many [home buyers] will be able to settle on houses. There are problems even with firm [loan] commitments."

Two Washington mortgage firms, Fidelity Bond and Mortgage Co. and Steed Mortgage Co., reneged on hundreds of loan commitments last week as their financial sources dried up. That sent prospective home buyers and their realty agents on a frantic search for other money. Numerous other institutions stopped taking loan applications or only quoted new mortgage rates each day, so they wouldn't have to make a loan at an interest rate they soon might deem too low.

"High interest rates are a disaster for us," said John Stadtler, chairman of one of the city's largest saving and loans. National Permanent Federal.

"Fewer people are going to qualify [for loans] and there's not a thing we can do." CAPTION:

Picture, This Capitol Hill row house was listed five months ago for $178,000 . . . dropped to $167,000 . . . then to $162,500 . . . and then to $159,500. By James M. Thresher -- The Washington Post