Are resale housing prices appreciating or being inflated? Take your choice. But appraiser Alfred W. Jarchow of Rockville points out that resale housed prices in Montgomery County rose nearly 9 percent in the first five months of 1978, 2 percent above the average increase for those months in the previous four years. His statistics also show that May resale prices, while only 1 percent higher than in April, were 11 1/2 percent above the level of resale prices in May 1977.Jarchow's statistics also show that the Montgomery median resale house price in May was $68,500.

Housing Data Reports, one of the published services provided for a fee to builders and others by William and Renay Regardie, reports that "the long-anticipated decline in the Washington housing market has finally hit." Additional comments, based on visits to and interviews with new home sale offices, were: "Sales are declining. Traffic is hibernating. Prices keep increasing. . . . Expect sales to remain soft throughout the summer." Not unlike others looking into future, the Regardies see interest rates declining in September. But they seem to be off base in noting no shortage of mortgage money today. That's not what the lenders have been saying.

Meanwhile, despite the downturn in sales of higher-priced new houses here, the folks doing the condo conversion and minor rehabilitation of Park fairfax town houses and apartments in Alexandria are instituting a lottery to sell units to non-residents. That's because a second village with 547 units has been more than half sold out to rental tenants. They got first dibs. Sales director Harold A. Lewis said that 4,000 people who have indicated they are interested in buying have been told that the lottery, to be held at 10 a.m. July 15, will establish priorities for a chance to purchase units.