Property at a corner of 14th Street and New York Avenue NW, an area not thought to be prime in recent years, is expected to be sold Oct. 15 at a public auction for at least $7 million -- nearly six times what the owners paid for it less than three years ago.

The 18,400-square-foot site on the northwest corner, formerly the site of the Trans-Lux building, has been used as a parking lot. It was sold by developer John McShain for $1.2 million -- about $65 a square foot -- in January 1977 to a group headed by Jon Gerstenfeld and Harold Zirkin.

At the time, that area was not regarded as ready for development -- principally because of the tenderloin aspects of the 14th Street corridor. In the interim, however, new-office leasing has flourished downtown and there has been considerable development east of 15th Street NW.

Contributing factors have been the resurgence of redevelopment plans for Pennnsylvania Avenue NW, a construction start on the city's convention center and relatively attractive prices of land in the old downtown.

As a result of recent nearby land sales in the range of $300 to $400 a square foot, the Gerstenfeld-Zinkin group decided to "really test the market," Zirkin said, by employing Michael Fox Auctioneers of Baltimore to handle the public sale, which has been advertised for several weeks.

The auction plan stipulates that the minimum opening bid must be $7 million, approximately $384 a square foot.

The site at 14th and H streets and New York Avenue NW is zoned for commercial development. Auction terms specify a total deposit of $500,000 from a successful bidder, with $250,000 in certified funds at the time and place of sale. Also, 3 percent of the bid price will be charged to the successful bidder as a buyer's premium and added to the final price.

"I probably will be there with my certified check for $250,000, but I'm not sure yet whether I'll be bidding," said John Akridge, a young developer of midtown office buildings here. "It's certainly a unique and exciting situation for Washington, where some of us have become accustomed to bidding privately for prime sites.

"Yes, I think bidding will be higher than the minimum," Akridge said. "Everything is getting too expensive. But there are a lot of buildable sites awaiting favorable financing. If all or most of them get built we could have a glut of downtown office space by 1983."

Several years ago, Akridge paid $375 a square foot for the YWCA site at 17th and K streets NW, where he plans to build an office building next year. 1That price was considered a high watermark for site acquisition in downtown.

Recently, however, property at 14th and L streets NW was reportedly sold for $3.5 million in cash. That would be $342 a square foot for the 10,220-foot property, former site of a Gulf service station. Another large property at 14th and K streets NW reportedly sold for more than $400 a square foot.

James Eichberg, an office-leasing specialist and first vice president of the Washington Board of Realtors, called the planned auction "an imaginative approach," but said he was "not certain whether it's good or bad for the industry. My guess is that the bidding will take the price over $500 a square foot.

"This hot market for new office buildings should make it possible for the owners to get maximum dollars. It's a hot part of town today, near a new Metro station site and across the street from the next Washington home of the National Association of Realtors."

Hundreds of real estate people are expected to show up for the auction, many just to see what's happening.

"I wouldn't miss it for the world, "said one Realtor -- who has no plans to make a bid.