The federal Beige Book reporting concludes construction and realestate activity is staying a strong course, but there arecontinuing signs that activity is cooling - an assessment that mayhelp to offset the region's third-quarter "at risk" foroverbuilding charge from the FDIC.

All but Houston is showing a slowdown in residential markets.Builders claim rising interest rates have sidelined some would-behomebuyers and precipitated a surge in apartment demand. Someregions reportedly are experiencing 20-year lows. Despite thedemand, the highly competitive market is still courting prospectivetenants with offers for incentives and rent concessions.

The nonresidential market remains at a high level, but somebuilders are voicing concern about a leveling off in demand forretail property. Meanwhile, 11th District commercial space demandis triggering jumps in construction costs and rents.