Jim and Cathy Peifer''s mid-Carmel Valley home has, as Realtor Judy Lyle describes it, an unusual amount of potential at a great location.

"It''s a really usable acre which is hard to find in the Valley," Lyle says. "Carmel Valley being narrow, you see a lot of property being advertised as having two or three acres, but then it''s going uphill and you can''t do anything with it."

The Peifers have two quarter horses in a corral behind their house, a lighted riding arena, and an 1100-square-foot outbuilding containing two offices and a workshop.

An irrigation well provides water for lawns, horses, and fruit trees. Sprinklers keep the dust down in the horse area. One-hundred-year-old walnut trees line the fence at the entrance to the property. The Carmel River is a nice walking distance, but not so close to put the home in danger of flooding.

"It''s really a friendly property," Lyle says. "It''s close to town, convenient, but it''s rural and provides a lot of open space."

Cathy Peifer says that her family has lived in the home for 21 years, since she and Jim married.

"We raised a daughter and a grandson here," she says. "When we first moved in, it was very overgrown, with no fencing and lawns."

Besides building the office structure, the Peifers have made other improvements, such as adding a 500-square-foot redwood deck to the back of the house last year. Another, smaller deck with a hot tub comes off the master bedroom. Both decks look out at mountains on either side of the Valley; Saddle Mountain to the South, and to the North, the Peifers can watch their cattle grazing on the distant hills.

Although the home is older, it''s very clean and cheerful. Bright curtains and light paint make it feel like a family home to settle into.

"It''s that ''60s style house that a lot of people grew up in," Cathy says. "We''ve done some interior things, but the kitchen is still original, although we''ve added new appliances."

And the three bedroom, 1700-square-foot house has rooms that are large enough to accommodate parties or large family gatherings.

"I''ve had Thanksgiving dinner here for 20 people for 20 years," Cathy says. "It''s flexible--the whole property is flexible. If somebody doesn''t like horses, they could take the horse corral down and put in a swimming pool."

Cathy walks out to give the horses, Dancer and Cougar, cookies and a kiss. She mentions that Cougar got his name for surviving a mountain lion attack on a trail ride in the Rockies. The rust-colored horses eat their treats against a backdrop of green hills. It''s quiet, and private feeling.

"It feels like you''re way out in the Valley, but you''re so close to everything," Cathy says. "But it''s only one mile to Safeway, and four miles to town."

Cathy rubs some dust off Dancer''s nose.

"We''re selling the horses and moving to Phoenix to be closer to my daughter, who''s expecting a baby," she says. "It''s a whole lifestyle change. I''m excited by it, but we''ll miss it."

Price: $939,000. 27315 Schulte Rd., Carmel. Contact Judy Lyle of Coldwell Banker Del Monte Real Estate at 626-2221.