Here in southern California, where a basic house costs $100,000, a new home for $50,000 that includes the land can be a real steal. And that's just what Covington Bros. Technologies Corp. is selling.

But there's a catch. The houses' walls are neither wood or brick. They're polystyrene -- the same stuff, in fact, that is used to make disposable coffee cups and picnic coolers.

There's more to the houses than that, of course. Once they're erected, the plastic foam walls are sprayed inside and out with Portland cement. That makes the walls five times stronger than conventional house walls and provides additional insulation, the company says.

"We're still in the infant stage," says Loran D. Covington chairman, who believes that his plastic-and-cement houses are just what's needed in these inflationary times.

Whatever the truth of those claims, it's certain that Covington's houses show how overheated the nation's hottest housing market has become. Plenty of people hereabouts regard a $50,000 house built out of anything as an honest-to-goodness bargain.

When Covington opened its first subdivision last year in Fontana, Calif., about 50 minutes from Los Angeles, all 57 homes in the tract sold in about three hours. And Mayer Environmental Housing quickly sold the 40 houses it built in nearby Perris in a joint venture with Covington.

"We were all set with mockups to explain the system," said Robert Lunny, a Mayer division manager, "but all people wanted to know was how much will it cost and what are the monthly payments?"

Lunny's statement isn't as far-fetched as it might sound. Rita Morales, who lives in a Covington-built home in Fontana, said she was having trouble driving picture hangers into her walls but didn't realize that her house was built of anything unusual until a reporter asked her how it was to live in a house built of plastic foam and cement. Aside from hanging pictures, Morales said, she likes the house just fine -- especially because it has more room than her old house.

Edwin Heck, who lives in a polystyrene house in Ontario, Calif., said he solved the picture-hanging problem with a mortar drill-bit to pierce the cement wall coating. Heck said he and his wife had wanted to leave their apartment, and after six-month house hunt they heard a Covington sales representative explain the construction technique.

"Before that, we hadn't found anything we liked for the money," Heck said. His house's only problem is hairline cracks in the cement walls, he said, but the company has promised to patch the cracks when the house settles.

The Covington system centers on a "core module" produced by an assembly line. The module contains a fully equipped kitchen, two bathrooms, furnace, laundry room and plumbing and electrical fixtures. Covington trucks the module to the housing site, then pours the surrounding concrete slab foundation. The houses don't have basements.

Next, up go the wall panels. Strips of polystyrene are compressed inside steel wire frames to produce four-foot- by-eight-foot panels, which are linked together and then sprayed with the cement. Finsihed houses are from 1,200 to 1,350 square feet in size.

The construction process eliminates lots of costly lumber and skilled labor, said Ken Consaul, who heads Covington's building-components division. Manufactured houses themselves are nothing new, but most are built with lumber and are assembled on the site by highly paid carpenters.

Surprisingly, rival builders don't criticize Covington houses for construction quality, although they do think the row-after-row sameness will limit the houses' appeal.

"The quality of construction is equal to the quality of constuction houses," said James Cashman, a builder in Riverside, Calif., who is president of the Building Industry Association, a trade group. "But our problem as builders is to avoid standardizing houses so much that they aren't marketable. You get so busy saving money, people don't like the house."

"The simpler your keep it," responds Covington, "the less expensive you keep it." But he acknowledged that his company hopes to avoid a cookie-cutter image by developing variations of its core modules and roof styles and by offering optional "cathedral" ceilings.

The homebuilder expects to stake out a vast market among frustrated middle-to-low-income Americans who are gradually being excluded from the housing market. It expects to put up about 2,000 manufactured polystyrene houses -- plus more in joint venture arrangements -- this year, compared with 1,100 in 1979.