On a warm, winter afternoon a woman is walking through the tree-lined streets of Green Acres, a small Bethesda subdivision near the District line. She lives nearby, in one of the high-rise buildings of Friendship Heights, but she says she likes to walk in Green Acres because it is so peaceful.

Green Acres is a 40-year-old community of houses that once were moderately priced but now often sell for $90,000 or more. The subdivision was built on part of the Loughboro family farm and the original mansion still stands in a secluded area at the foot of Allandale Road near Little Falls Parkway.

It is a once-modest community that has grown grander thanks to the area's inflated housing market and the increased value placed on closein location. Many of the residents have lived there for several decades and have elected to add on to their small homes rather than move.

Old-timers have seen real estate values rise fantastically. A house in Green Acres, with very few improvements, might sell today for 15 times the original price.

It's example of the resurging values of older, well-built houses inside the Beltway. By today's standards, the original houses in Green Acres are relatively tiny and outmoded.

Ultimately, however, Green Acres is an example of the oldest of real estate fundamentals: Location isn't everything; it's the only thing.

Houses in Green Acres, which is bounded by Little Falls Creek on the northwest and River Road on the northeast, sell fast, says Angela Pedersen, an agent with the Stuart & Maury real estate firm.

She describes the location as "strategic." It is near the thoroughfares of Massachusetts and Wisconsin avenues and it is close to shopping and transportation, she said. The houses, built by the late Albert Walker, are "as fine as many custom houses," Pedersen added.

Walter H. Kilbourne Jr., a resident of the community who is a commercial realtor downtown, said the house he bought two decades ago was outgrown by his family.

"But we really didn't want to leave," he said. "Like others, we have added a lot of space -- two bedrooms, two baths, two fireplaces, a family room and storage. We've been told that we over-improved the house.

"But we like it fine. In fact, my wife, Carolyn, has gotten her realty license and is going to specialize in resales in this area."

Maurice and Gertrude Keane are original residents who remember when River Road was two lanes wide and nearby areas were farmed. They paid $6,000 for their two-bedroom house in 1938.

"We put in air conditioning and added a garage and some insulation," Keane said. "One down the street recently sold for $101,000, I was told. We do not plan to move. Taxes? They were $84 the first year; now it's a bill for $1,100."

Many of the homes in Green Acres now have more than one bathroom, which today's owners consider a drawback of Walker's plans. Additions abound in the community; some appear larger than the original 20-by-26 and 24-by-18 1/2-foot houses.

The homes were designed by Schreier & Patterson (later Patterson-Worland). Michael (Pete) Patterson, who is now retired, recalled that the lots were mostly 50-by-100 feet, that the houses had was brick veneer or asphalt siding with oak floors, full basements, slate roofs and plaster walls.

"It was an early FHA financing job and most of the houses were built and sold between 1938 and 1942," Patterson said. "A few were finshed after World War II."

Madeline Sanford, who lives on Smallwood Drive, said Green Acres "used to be a modest neighborhood but now it seems to be wealthier.

"It's safer here than most places," she said. "It's sort of isolated, but the house is nearly perfect. I just wish it were two feet larger."

Marilyn Sutherland, who lives with her husband, Robert, on Redford Road, grew up in Green Acres. The Sutherlands have enlarged the house they bought in 1972 for $28,000.

"It's convenient to our jobs and the increase in value has been wonderful," she said. "But there are too many houses being rented now."

One Green Acres tenant encountered on a Saturday afternoon stroll said that rents there range between $400 and $500. Another stroller said that five of six houses near the Green Acres entrance on Greenway Road are owned by one resident and that all have been substantially improved. Five are rented.

A community with approximately 180 middle-aged, mostly small houses, Green Acres looks good as it moves into its golden years. It seems to be recycling itself with new roofs, additions and paint.

Several houses recently sold for more than $90,000, according to appraiser Adolph Rohland, whose records go back to the earliest days of Green Acres. Other houses that have been enlarged and substantially improved would undoubtedly bring more than $150,000 -- maybe $200,000 -- if placed on the market. But houses tend to be resold less frequently than they do in some other suburban areas.

One resident recalled that builder Walker ("a tough old fellow") laid down strict covenants in the early days to assure that only white people could buy there and that they would not change the exteriors of their houses.

Federal law opened the ownership to all races. Walker's death about 15 years ago opened the door for additions or improvements.

Walker also developed nearby Wood Acres and built other houses in Westmoreland Hills.

John Jordan Jr., who has been active in the community association of Green Acres and neighboring Glen Cove, said that he likes the area's stability, the school, the library, the pool and the tennis courts. The streets have become even quieter in recent years after through traffic from Massachusetts Avenue to River Road was banned.