After descending for almost two years into what has become a deep recession, the Washington area residential real estate market is showing signs of renewed life.

The signs are faint and mostly anecdotal -- fewer homes for sale, open houses that are attracting dozens of house hunters and homes that are suddenly selling after languishing unsold for months. And helping to entice buyers are mortgage interest rates that are at their lowest point in a decade.

Such factors are fueling a growing optimism among area home builders, real estate agents, homeowners, local economists and marketing consultants that the residential real estate market has halted its descent and perhaps has stabilized.

But even the most optimistic observers don't expect the market to come roaring back any time soon.

"It seems we have probably seen the worst of it," said Michael Sumichrast, an area economist who started warning builders in 1987 of the industry's impending recession. Using a complicated formula that he developed two years ago, Sumichrast said the real estate market hit bottom in the last three months of 1990. He predicts the market will show a slight improvement in the coming months. "Hopefully, we are getting back to a somewhat normal market," he said.

People with homes to sell said they have noticed a change.

Diana and Carl Rickenbaugh tried to sell their Prince William County town house for $169,000 last year and it sat on the market for nine months. "Only one person came to visit," said Diana Rickenbaugh.

Discouraged, they took their house off the market in September. Last month, they decided to drop the price by several thousand dollars and try again.

Three weeks later, the Rickenbaughs sold their house. And, when they started shopping for a new home, they noticed something else they hadn't seen before.

"Every open house that we went to look at was filled with people," said Diana Rickenbaugh.

Further bolstering the sense that the worst may be over are the numbers of people crowding into model homes and open houses and showing interest in home buying. Fifty-three people attended a recent seminar for first-time home buyers held in Wheaton by Shannon & Luchs Co. real estate agent Norma Roseman. "I think people are tired of waiting" to buy a house, Roseman said.

About 50 people toured a $1.5 million McLean mansion during a recent open house. "Six months ago, if we had one or two people, we counted it as a success," said real estate agent Barbara Lewis of Prudential Preferred Properties. "It was better than nobody."

The number of people visiting the model homes of NVHomes L.P. has quadrupled in the last six weeks to about 1,200, said Charles Langpaul, executive vice president at NVHomes. "I'll bet a lot of money that we'll have 50 percent more sales in the first quarter than we had in the fourth quarter," he said.

Industry experts cautioned that the apparent stabilization is, at best, fragile. The increased numbers of house hunters haven't yet translated into increased overall sales in the region, although some individual builders and real estate agents have reported higher sales. There are, in the words of Northern Virginia Association of Realtors's President Gayl Warman, "a lot of circling -- not too many landings."

The troubled times for the residential real estate market have been duplicated in the commercial real estate sector. The Washington area started the year with 41.6 million square feet of vacant office space, according to a survey by the Washington-based market research firm Cor/Net. The highest vacancy rates are in Northern Virginia, particularly in the Dulles corridor. Builders who are faced with the most empty space have offered big discounts to potential tenants in exchange for signing leases.

And with real estate values slumping, some developers and builders have declared bankruptcy or are in negotiations with lenders to restructure debts. One of the major figures in Washington business, Dominic F. Antonelli Jr., a parking lot owner who built a substantial real estate empire, recently declared personal bankruptcy after his finances collapsed under the weight of risky investments and bank loans amassed during the real estate boom in the 1980s.

"The commercial market is not going to rebound as quickly as the residential market because there probably was more overbuilding," said Roger W. Snyder, chief executive of the Northern Virginia Building Industry Association. "New job growth is the key {to a turnaround}. Musical chairs {among tenants seeking better deals} is not the answer."

Snyder said "the dilemma in both the residential and commercial markets is being able to get construction loans."

In the residential market, any number of blows could frighten would-be home buyers before they sign on the dotted line, including a worsening of the Persian Gulf War, higher interest rates or signs the local economy is falling further.

Home builders, a perennially optimistic breed, said privately they're wary. Even those who said the bottom has been reached are quick to note that a recovery in housing is not likely to begin for months and it is not likely to be very vigorous. In other words, the bottom may have been reached, but now there may be something of a plateau.

"The best description for 1991 is that it is a bridge over a deep gorge," one home builder said. "And there's going to be some bodies left at the bottom of the gorge."

The gorge has been lethally steep. Since 1988, sales of new and existing homes slid about 30 percent, according to figures compiled by the real estate information service of Rufus S. Lusk & Son Inc. Building permits in the Washington area last year plunged 46 percent to 24,687 from their peak of 45,484 in 1987.

The decline took its toll as numerous realty firms and builders shut down or scaled back. Homeowners who bought at the market's peak were suddenly faced with houses that were worth less than they paid.

But a combination of factors -- a sharp decline in interest rates, a decline in the inventory of homes and a decline in prices of more expensive homes -- have led people who follow the real estate market to predict the worst might be over.

"You'd think that with a war going on and with a national recession that appears to be deepening that people would be cautious at this time ... but the peculiar market that we have in Washington has decided to improve," said Arlington real estate broker Mitchell Schneider of Hayes & Schneider Properties.

Falling interest rates are helping to fuel such talk. Except for a brief dip in late 1986 and early 1987, mortgage rates are at their lowest levels in at least 10 years. As of last week, local lenders were offering fixed-rate mortgages averaging 9.125 percent, according to Peeke Loanfax Inc., a Gaithersburg company that tracks the mortgage rates of local lenders. Home buyers seeking a one-year, adjustable-rate mortgage could get a starting rate of 7 percent.

Another sign of hope is the glut of homes clogging the market in many areas has eased, a signal that the number of buyers and sellers is moving into a healthier balance. In Northern Virginia, the number of existing homes for sale on the Multiple Listing Service (MLS) has fallen 14 percent to 16,186 from a peak of almost 19,000 in September.

In the District, the number of existing homes for sale has fallen 20 percent to 1,600 from a peak of 2,000 homes in January 1990. Don Denton, president of the D.C. Association of Realtors, said a healthy supply-demand balance would be about 1,300 homes. By contrast, at the height of the market frenzy there were 823 homes listed for sale.

In Montgomery County, the number of listings in the MLS has held steady, but that may be because the listing includes commercial and rental properties. A notable exception is Prince George's County, where the supply of existing homes for sale climbed 12 percent to 3,580 homes at the end of January.

Among new homes in the Washington area, the supply has dwindled to 2,500 houses, less than half of the level last year. At the current pace of sales, that's a two- or three-month supply. "I think we're in a great situation, inventory-wise," said Renay Regardie, president of Housing Data Reports, a new-home consulting firm.

Another factor luring buyers back to model homes and open houses is the apparent breakup of the logjam over prices that stalled sales for more than a year, agents and builders said. Sellers are more willing to drop prices below what they thought acceptable a few months ago. And most buyers have realized they won't pick up a house for a fraction of the asking price.

A four-bedroom Tudor-style home in McLean that sat on the market for five months sold recently, but only after the owners dropped the price from $550,000 to $455,000, said Flo Cromartie, an agent at Prudential's McLean office.

"If you don't bring your house down into the right price range, you're not going to sell it," said Warman of the Northern Virginia Realtors group.

Potential buyers are playing tough. "They're not check-wavers -- 'Gee, I love the kitchen, show me where the lot is,' " said Langpaul of NVHomes. "They're very sophisticated buyers who know what the market is."

William Barkdol and his fiance'e, Michelle Britt, bought a single-family rambler for $125,000 in Germantown. But that was only after they looked at 40 houses over three months and made offers on 12 houses before their offer on the Germantown house was accepted.

Paul Cudihy, who was touring a $575,000 model home in Oakton last weekend with his wife, Carol Cudihy, said: "We're looking to deal and there are some deals out there." The Cudihys are asking $310,000 for the house they now own and they said they won't sign a contract for a new home until their own house is sold. "Otherwise it's an exercise in futility," Paul Cudihy said.

Real estate broker David Craw, sales manager for Mount Vernon Realty Inc. in Centreville, said the brightest sign he is seeing is the return of many first-time buyers who had been priced or pushed out of the market in the past few years. They are ardently courted by sales-starved agents and builders who are offering such attractions as 5 percent down-payment plans, ultra-low mortgage rates and apartment-lease buyouts. Builders are also constructing more condominiums and lower-priced town houses for the first-time buyers market.

"They couldn't play in 1987 or 1988," Craw said of the first-time buyers. "And they're strong because they don't have homes to sell. And they are getting better mortgage terms than we've seen in a decade."

The hopeful signs of recent weeks, however, don't mean the real estate market is readying itself to come roaring back.

"What I want you all to recognize is that I believe we're going to be in this phase for quite a while," Housing Data Reports's Regardie told a group of builders last week.

Economists said the prospects any time soon of strong, renewed regional economic growth -- the engine that drives any real estate market -- aren't good for the Washington area.

"What we may have is a relatively long trough," said Robert Sheehan, a vice president and economist of Regis J. Sheehan & Associates, a housing market research firm that tracks the the region's building permits.

Economist Sumichrast said if the bottom has been reached in terms of sales volume, prices would not be expected to revive in the near term. In fact, a study of Washington area home prices by the Federal National Mortgage Association showed prices of homes that sold for less than $235,000 rose an average of 6 percent during the last half of 1989. In the first half of 1990, the survey showed prices of homes selling for more than $235,000 fell by 9 percent.

"Prices are going to remain depressed for the next couple of years," Sumichrast said.

Staff writer Kirsten Downey contributed to this report.