For years, Frank Hurley and his wife, Kit, had been renting a house in Bethany Beach for their summer vacations. They loved the fact that their three children could roam the small seaside town by themselves, an independence they couldn't match in Washington.

So when Hurley, 54, sold his pharmaceutical research company three years ago, the couple decided to buy their dream, an oceanfront house in Bethany, for $1.8 million, putting down "about a third" in cash.

The Hurleys -- and other cash-rich Washingtonians -- are fueling a buying boom on the Delaware and Maryland shores from Lewes to Ocean City, transforming Washington's backyard beach area into something more akin to Long Island's chic Hamptons.

Real estate agents working in the area say demand, especially for high-end oceanfront houses, is greater than ever before. And prices for these luxury homes and oceanfront lots have risen dramatically.

"We've had oceanfront lots in some cases go from $750,000 to $1.5 million in the last two years," said Allison Bateman, an agent with Jack Lingo Inc. Realtor in Rehoboth Beach, Del. ARIS, the Automated Regional Information System, the database where agents list properties for sale, reports that the median sales price for a house with four or more bedrooms in coastal Sussex County, Del., was $1.12 million in August 1999. That's up a healthy 19 percent from August 1998, when the median sales price was $943,950.

Consider what has happened to one 13,000-square-foot lot one house back from the water in Indian Beach, just south of Dewey Beach. The lot, bigger than the average, sold in January 1996 for $300,000. It changed hands just shy of a year later for $330,000. In December 1997, it went for $430,000. Just a month later, in January 1998, it sold again -- for $570,000. Now agents value it at about $800,000, a phenomenal 166 percent increase in less than four years.

What's going on?

"What you have is professional people at the pinnacle of their careers," Bateman said of recent beach buyers. "They've made money on the stock market, on their investments, their jobs, and they're now in a position to afford a second home." She said the relative proximity of the area to Washington makes it a natural second-home market for Washingtonians.

"The typical scenario is this," said Jim Waggoner, director of resort rentals for Long & Foster's beach operations. "When couples have children, they start coming to the beach. They come all through the years when their children are little. Finally they get to the point that they can afford a second home. That's when they buy."

The Hurley family fits this pattern: By the time the couple bought their Bethany property, their oldest child was 17. They had been going to Bethany for almost 20 years.

The demographics of the baby-boom generation, whose older members are nearing retirement, are also fueling the explosion in beach property, experts say. Leslie Kopp, Long & Foster's top agent on the Delaware shore, said many of her buyers are buying beach houses with their future in mind. That means elevators for their old age, beach access and lots of bedrooms for unborn grandchildren.

They want "somewhere everyone will be able to come," Kopp said.

Agents say the most sought-after area by far in Rehoboth, Dewey, Bethany, Ocean City and the smaller resorts is the "ocean block" -- the one to three actual blocks east of busy Route 1, all the way to the beach.

"A lot of people who have children or grandchildren don't want them to cross Route 1," Kopp said. "They're looking for that small-town feel where their kids can wander into town to amuse themselves." Agents say almost all buyers want to be able to walk to the beach.

Kopp, who sells primarily in Bethany, said the bulk of her clients are from the D.C. area -- Northern Virginia, Montgomery County and the District.

"We've definitely been influenced by the technology boom in Northern Virginia," Kopp said. "That's a lot of who's buying."

Agents report that recent buyers at the beach include entrepreneurs, America Online and MCI WorldCom executives, other high-tech employees, and banking and finance people, as well as expatriate families who want a house in the United States so their children will grow up more familiar with their home country.

They're also finding that the people buying these second homes are getting younger, a trend they attribute to the nation's roaring economy.

"Younger clients have more money today than ever," Kopp said. "And they're not scared to spend it."

Recent buyers have been paying cash or making large cash down payments for higher-end properties.

"A lot of my buyers are able to write cash contracts, even if they're not planning on paying cash," said Bateman of Jack Lingo Inc. "They have no hesitation about putting themselves in that situation."

But one thing today's luxury buyers are not doing is renting their houses out.

"If you've just paid a million dollars for a house, are you going to rent it?" asked Sue Disciullo, a rental agent for Long & Foster in Bethany. "The answer is no."

It's the high-end oceanfront and ocean-block houses that are disappearing from the rental market, Disciullo said. At the same time, more people are looking to rent a beach place every year. And prospective renters are already calling for next summer's rentals.

"There are fewer of the really nice houses to rent," agreed Linda Book, an agent with O'Conor, Piper & Flynn ERA. And rental rates have already gone up about 5 percent for next summer, rental agents report.

Disciullo said Long & Foster now has more "town houses and middle-class" houses on its rental lists.

But why aren't the big-house owners renting the way they used to? They simply don't need the money.

The Hurleys, for example, wouldn't dream of renting their flash oceanfront Bethany pad. The couple plans on working there in the summers, telecommuting to their Washington jobs from the high-tech beach office they've installed in the house. The Hurley house also includes a sauna in the basement, a state-of-the-art kitchen and several decks overlooking the ocean -- improvements that added up to several million dollars over the purchase price, according to contractors working on the property.

"No, no, no," said Frank Hurley when asked about renting the house out to help defray costs. "I don't need help with the expenses."