When one real estate agent describes American University Park as a "pocket of poverty" in upper Northwest Washington, it is tongue-in-cheek. She is comparing quiet, fairly modest AU Park with its carriage-trade neighbor, Spring Valley.

Houses in the former sold for a median of $135,500 last year, $35,000 above the city's median, but well below Spring Valley's $246,250.

Divided by Massachusetts Avenue, the two neighborhoods share the convenience of being close to major arteries. In AU Park, bounded by Western, Wisconsin and Nebraska avenues, many of the houses are small and upwards of four decades old. The first residents of the neighborhood were farmers, two of whose Victorian-style homes remain.

The convenience of the neighborhood has helped double the median sales price for homes there over the five years. Among the fewer than 100 houses that go on the market in AU Park in a year, prices tend to range from about $100,000 to $300,000.

Most of the modestly sized brick and frame houses have three bedrooms and one or 1 1/2 baths. The community has an old-shoe look, with tall old trees, quiet streets and an abundance of azaleas.

The neighborhood has no special relationship with American University, which is located on the Spring Valley side of Massachusetts Avenue. The Methodist Church built the university at Ward Circle in the 1920s.

John Kokes, who teaches real estate courses at AU and lives in AU Park, describes the neighborhood as a "sleeper," modest in comparison with the neighboring Spring Valley and Cleveland Park but diverse in housing styles. The styles range from 1920-vintage bungalows and rowhouses to large masonry ramblers. There are even two 100-year-old farmhouses.

Real estate agent Elizabeth Miller doesn't live in AU Park, but she was graduated from the university, and her husband teaches there. She joined Smider Bros. Inc. a year ago. Deciding that she wanted to specialize in an area, Miller chose AU Park, she said, because it has a sense of "permanence, tradition, diversity and harmony -- plus lots of convenient schools, parks, churches and shopping."

Miller enlisted the aid of university archivist Marion Logue to learn about the neighborhood, which is marked on the north, at Western Avenue and Fessenden Street, by a small stone, the Northwest No. 6 marker placed there two centuries ago by surveyor Andrew Ellicott.

Once the decision was made to identify 100 square miles as the site of the new national capital in 1790, Ellicott was commissioned to survey the area. He placed his markers one mile apart. Over the years, the Northwest No. 6 stone has been maintained by the Daughters of the American Revolution. Now there is a bus stop nearby, and the park is little more than a patch of unmowed open land.

Miller also obtained a copy of an American University Heights Addition advertisement published in Zion's Herald in 1898. J. D. Croissant and David Stone were the early developers. Croissant's ad proclaimed the "addition" as being low in price for lots ($700 to $900) and asserted that "your money will be absolutely safe." It was noted that a dozen "attractive and substantial houses" were being built near the property.

But Croissant didn't stop there. "Straws show in what direction the wind blows -- many wealthy and shrewd business men who foresee the great increase that is coming are making like investments. Land values in the northwestern section have increased at a remarkable rate. Lots near Dupont Circle, only three miles from this ground, that sold 12 years ago for $800 now sell for $8,000."

A Croissant-Stone booklet obtained by Miller from Mr. and Mrs. Thomas Noyes, who own a fine old house at 4701 Fessenden, further proclaims: "We want good, honest, temperate men to buy and build on this property. We have selected our purchasers thus far, and it is too late now to change our plan. The sale of liquor is prohibited in our deeds and all houses must cost at least $2,000; many of those already built have cost much more than required."

Miller has written her own promotional pamphlet for the neighborhood.

She cannot explain the name change from "Heights Addition" to "Park," which was made prior to 1910, according to a land transaction record from the hand-written files of District Realty Title Insurance Corp. The original developer apparently renamed one section Spring Valley and the other section east of Massachusetts Avenue was named American University Park.

Another document shows that the American University Park Citizens Association was organized in 1926 as a "result of promised zoning changes which would have changed the residential A restricted zoning in part of the area to permit more intensive development. This was successfully opposed."

The civic group was able to have "speed bumps" placed on heavily traveled 46th Street, which runs through the neighborhood from Massachusetts Avenue to River Road. But the group was unable to block construction of a six-story office building and commercial complex next to the Spring Valley shopping center.

Peter Stathis, the citizen's association president, grew up in the two-story Cape Cod he now owns. He and his wife Jennie like the small-town atmosphere, he said. A current concern of long-time residents is the effect of the rising assessments and taxes on elderly residents, he said.

Frances Atchison, a long-time resident, works for the Shannon & Luchs real estate firm, where she specializes in AU Park. Increasingly, she said, young families are buying in the area, often choosing red-brick colonials and expandable bungalows. "I call this a 'pocket of poverty' near expensive neighborhoods," she said. "But there's not much for sale now under $100,000."

Among Atchison's current listings is a house on Brandywine Street that has skylights and two baths; the asking price is $223,000. A four-bedroom, two-bath house, "a typical brick two-story with four bedrooms and two baths," can be had for $162,000.

Paul Sampson, chief editor of National Geographic's news service, bought his three-bedroom house on Alton Place 25 years ago for $20,000, and believes it would sell now for more than $125,000.

Few new houses have been erected in recent years in American University Park, although investors have rehabilitated some of the older houses -- and sold them at high prices.

Older houses near Tenley Circle and Friendship Heights are among the less expensive of the neighborhood's dwellings, but their value is expected to increase markedly once Metro stations at Tenley and Friendship open there in two years. CAPTION:

Pictures 1 through 6, The houses of American University Park in Northwest range from turn-of-the-century farmhouses to contemporary styles. The commercial structure built next to the Spring Valley shopping center, was opposed by the neighborhood civic group, which argued that it would overwhelm the area; Map, no caption, by Richard Furno -- The Washington Post; Picture 7, Agent Elizabeth Miller at a boundry stone in American University Park. Photos by Joel Richardson -- The Washington Post