Falls Church, population 10,000, doesn't pretend to compete with Georgetown, Foggy Bottom, Capitol Hill, Old Town Alexandria or Reston. But this small Virginia city six miles west of Key Bridge is experiencing a mild boom in town house development.

Forty-eight expensive town houses are currently being built at three different sites there and several other upper-priced clusters are planned. In addition, 194 moderately priced town houses are being built at the Winter Hill/Cherry Hill complex bordering West Broad Street, where 200 garden apartments were earlier converted to condominium town houses. In the past year, 130 of the new houses have been sold.

A survey in 1976 showed that 60 percent of the city's 4,500 dwellings were single-family houses. Falls Church planning director Henry Bibber said fewer than 20 dwellings are normally built there each year; the new houses usually replace razed ones. He said Falls Church, which is two miles square, tries to "maintain its single-family residential charm."

Although intensive residential development of detached houses slacked off in Falls Church after the 1950s, there remain some small, bypassed sites of one-half to two acres. Some of these commercially zoned properties, which are priced between $4 and $6 a square foot, are being looked at as potential sites for clusters of good-sized town houses that would sell for more than $125,000.

Sales reports indicate that there is a market for houses in that price range, which is a popular one in this area.

However, the Winter Hill/Cherry Hill redevelopment project - where new, two-story town houses start at $66,000 - dominates the selling scene in Falls Church. Wills & Plank rehabilitated 200 Cherry Hill garden apartments there, renamed the project Winter Hill and sold the units as condominium town houses. The remaining rental units were razed and new town houses were built. Houses in this section, still called Cherry Hill, have two or three bedrooms. Young couples and single persons are buying most of them, the builders say.

Larger and much more costly houses are being built at the Tollgate of Falls Church, a two-state development of traditional, Williamburg-keyed houses put together by engineer Walter L. Phillips, banker Arva E. Gentry and attorney William M. Baskin.

Barkley-Pierce Associates, an architectural firm that developed the James Thurber Court Town houses in Falls Church in the 1960s, designed the houses. The designs keep in mind the heritage of the tollgate operated by John and Mary Williams at their homestead on nearby Leesburg Pike. Tolls collected there financed construction and maintenance of a section of that muddy roadway more than a 100 years ago.

The first cluster of eight Tollgate houses has been sold out and a second grouping started. Altogether 28 to 30 units are expected to be completed early next year. Harry Davis, who was in construction here for 50 years, has come out of retirement to work on the project.

At Governor's Square, also designed by Bakley-Pierce, the first section of eight town homes will be ready for occupancy next July. Prices there range from $150,000 to $170,000. All the houses have built-in garages for one or two cars, living space on three levels and shafts left open for possible elevator installation.

Governor's Square developer Ray Sims plans to build a second, 15-unit section at the site at Great Falls and Little Falls streets, which was down-zoned from commercial to town house residential.

Elsewhere in Falls Church, Creative Environment Inc., is the developer of the Wrens, a grouping of 12 tradition brick and frame town houses at East Broad and Cherry streets. Bushey & Burry did the architectural and engineering work. Prices there range from $119,000 to $134,500.

In addition there are plans for a town house cluster at Lee Highway and Great Falls Street, to be called Trammell's Crossing. Developer Sims and architects Barkley-Pierce plan to being in April. Barkley-Pierce have another cluster on the drawing board that is planned for property at Grove and West streets later this year.

Several years ago, developer Bruce (Dusty) Rhoads built a cluster of nine contemporary town houses called the Steeples on West Street in Falls Church. Now those house, priced originally in the $60,000s, are reported to be reselling in the $90,000s.

City manager Harry Wells and building inspector and fire marshal Harrison Groves say that, in a modest way, Falls Church is part of the area-wide building boom. But they note that there are relatively few unbuilt sites in the city.

The tendency of developers now to build expensive residential clusters in areas previously zoned for commercial use indicates that values for housing sites have increased, the officials said, pointing out that their city has water and sewerage capacities to handle only moderate development and redevelopment. CAPTION: Picture 1, Products of a home-building boom in Falls Church include Governor's Square, where prices range from $150,000 to $170,000; Picture 2, Tollgate of Falls Church built near the site of a 19th-century toll house; Picture 3, the Wrens, traditional brick and frame town houses that sell from $119,000 to $134,500; Picture 4, Cherry Hill, a new complex where prices start at $66,000., Photos by Larry Morris - The Washington Post