Like the rising tide that lifts all boats, the stratospheric run-up in Southern California housing prices has put Watts -- yes, Watts -- in the vanguard of home appreciation in Los Angeles County.

The once predominantly African American community, which gained international notoriety during the 1965 riots, saw resale-home values increase by more than 40 percent last year, according to DataQuick Information Systems, a real estate research firm. Countywide, the median rose 24.8 percent.

Fueled by demand from Latino home buyers, the average price of single-family resale homes rose 41.3 percent between August 2004 and August 2005 to a median of $325,000. Affordability, or what passes for it in the Los Angeles market, is attracting first-time buyers. And the prices have made it a hot spot for property flippers. Nearly 10 percent of Watts buyers this year have resold within three months.

At a recent open house in an elegant two-bedroom home on East 93rd Street, Jeanette Williams smiled at a prospective buyer and handed over her cellular phone. Because Williams, an agent for Century 21 Award, does not speak Spanish, she depends on an agent back at the office to translate. Nine out of 10 of her clients are Latino -- as are most residents of today's Watts, according to U.S. census figures.

While Carlos Gonzales looked at the formal dining room, his friend Gabriel Ochoa translated as Williams quoted the home's price at $357,000 and explained, "This is a more serene area of Watts."

Gonzales answered in Spanish. "I'm hoping to find a single-family residence for my wife and two children. Right now, I'm still paying rent, and the rent is too high." Compared with his rental in another neighborhood of South Los Angeles, the construction worker said, "it's a better area."

Daniel Alvarez needs no translator. The bilingual agent with American Team Properties prints his fliers in English and Spanish. He specializes in South Los Angeles and can cite Watts streets and what's on the market from memory. "Watts is appealing because of the prices," he said, even though it is rapidly catching up with Los Angeles overall.

American Team Properties has more than 30 listings in Watts, ranging from $260,000 for a small house in need of major work to $410,000 for a newly built, four-bedroom home. All fall below the Los Angeles County median price in August of $525,000 for an existing single-family home.

More than 100 Watts properties are on the market -- many of them tract homes of fewer than 1,000 square feet, built after World War II. So far this year, 490 single-family homes have sold in the four-square-mile neighborhood, according to DataQuick.

Despite years of high crime, this part of Los Angeles also boasts quiet residential streets lined with neat homes and tidy yards with blushing bougainvillea, roses, violet morning glories, tropical birds of paradise and well-tended vegetable gardens.

But there's no denying the gang problem, and the violent crime that exists in parts of Watts. The Jordan Downs project, one of five public housing complexes in Watts, is one of the city's most dangerous areas, according to the Los Angeles Police Department. Watts is part of a 37-square-mile area patrolled by the South Bureau. If that area were a separate city, LAPD Chief William Bratton recently said, "it would be the most violent city in America."

The crime is not omnipresent, however, and does not deter newcomers or some old-timers.

Rodney Shepard, a residential and commercial developer, can afford to live anywhere in Southern California. He chooses Watts.

"It's my home. I was born in Watts," said Shepard, 55. "My parents were entrenched in Watts."

So much so that his father, a carpenter, and his mother, a homemaker who moved to Watts from New Orleans, owned five houses on the same block of East 111th Street. Shepard did move away, for college, and then to swanky homes in Long Beach and Lakewood. Then, when his aging parents became ill, he and his wife, Yvonne, a schoolteacher, moved back.

His company, RSS Development Inc., has built 50 homes over two decades in Watts. He also has built a complex for senior citizens and another for affordable housing in Watts. He has been buying vacant lots in Watts for years and is in the process of building three-bedroom, three-bathroom market-rate homes, which he may sell in the $350,000-to-$375,000 range. "By the time we build, by the time we sell," Shepard said, "who knows what the market will be?"

Residential and commercial developer Rodney Shepard, who grew up in Watts, has built 50 homes there in the past two decades. "It's my home," he says.Buildings burn in Watts during riots on Aug. 14, 1965. Forty years later, local leaders announced an initiative to spur economic development.Real estate agent Jeanette Williams shows prospective buyer Gabriel Ochoa a house in Watts. Demand by Latino home buyers has created a housing rush in the South Los Angeles community.Daniel Alvarez, a South Los Angeles real estate specialist, prints his fliers in Spanish and English. "Watts is appealing because of the prices," he says.