The effects of last week's layoffs by Enron will not likely beassessed in this or other reports until the end of the year.

For the third quarter of 2001, however, the report notes"vacancy rates are continuing to fall as rents make stronger gainsacross the Houston apartment market." The third quarter overallaverage vacancy rate decreased to 7.5% from the 9.5% measured atthe same time last year. The report contends that, "newer, moreupscale properties are posting the strongest reductions in theirvacancy rates, benefiting the most from the deceleration in newconstruction."

The Hendricks & Partners report attributes stronger rentgrowth to these new luxury units as well. The end of the thirdquarter saw an average rent increase of 6.4%, up from the 2.8% gainposted one year ago. The report puts the average market rent at$602 per unit compared to last year's $566 per unit.