Five town houses are being built at Merrywood on the Potomac, a 47-acre site on the Potomac River side of Chain Bridge Road (Rte. 123) in McLean.

Merrywood - girlhood home of Jacqueline Kennedy Onassas - was at the center of a flap 14 years ago when the property was sold to a Washington developer who planned to put up three-high rise apartment buildings there. That plan was subsequently shot down by neighbors and the Interior Department after a court battle.

Merrywood's owners were awarded $744,500 to compensate for a scenic easement guaranteeing that only low-rise development would take place on the sloping, wooded site above the Potomac.

Recently, architect James D. Nida, a partner with Walter Burns in Burns-Nida Development Co., was on the site to check the progress of the five houses under construction. Nida said sales contracts with an average price of $250,000 have been signed for the houses. Merrywood has 13 existing town houses - one of which was formerly rented by ex-Redskins coach George Allen - and lots for 17 more.

Developer C. Wyatt Dickerson adn his wife, former television journalist Nancy Dickerson, continue to occupy the original Merrywood house, which they bought late in 1964. The price for the house and land then was reported to be about $663,000 - approximately what developer Sheldon Magazine and a group had paid two years earlier to Hugh D. Auchinloss for the entire property, when the plan was to build apartments.

Auchincloss nad his wife, Janet (Mrs. Onassis' mother), lived at Merrywood, when the former First Lady was a girl.

After the Dickersons bought the Merrywood estate, a plan was evolved for the development of town houses. Former Interior Secretary Stewart Udall, who lived nearby and hand successfully defended Merrywood against high-rise development, was on hand in the late 1960s when Dickerson, architect Victor Gruen and several Washington investors kicked off plans for the expensive Merrywood town houses.

The first group of eight town houses came on the market during a down period in real estate and at a time, almost 10 years ago, when wealthy Washingtonians were not yet in a mood to pay approximately $200,000 for large, attached dwellings.

Frederick G. (Stretch) Harting, a mortgage banker who was one of the original investors in the early town house development, recalled the other day that the experience was somewhat harrowing because the market and the product did not mesh.

However, Harting said that as the "surviving" investor he had arranged the $250,000 sale of five acres for the first five Burns-Nida town houses. He said another five-acre tract for a single house being planned there recently sold for $150,000.

Architect Nida, whose new dwellings will be colonial in style, with brick exteriors and slate roofs, said that the interior plans for the first L-shaped group of five houses are flexible. This enables the individual tastes of buyers to be satisfied, he noted. Also, buyers are given an allowance to contract for their own custom-designed kitchens. Concord Construction is building the houses.

If the market continues strong for town houses at Merrywood, the once controversial complex could be completed within a few more years. The first of the new houses will be completed this summer, Nida said. CAPTION: Picture 1, These houses were built in the 1980s at the Merrywood estate next to the Potomac River in McLean. By Bob Burchette - The Washington Post; Picture 2, Average price of these hours under construction at Merrywood is $250,000. By Bob Burchette - The Washington Post.