OLYMPIA — Washington state's surging economy, driven by a continuing construction boom and red-hot real estate market, will pump an additional $493 million into state coffers, forecasters said today.

The good news - the third quarterly revenue surge in a row - brings the state's reserves to over $1.1 billion.

Legislators and administration officials on the state Revenue Forecast Council cautioned that the money shouldn't set off a spending spree, since the economy could cool a bit as the housing market softens, and the state could face a budget deficit in the next few years.

The first call on the new money should be pension funding and preserving a healthy reserve account, said state Budget Director Victor Moore. The council chairman, House Finance Chairman Jim McIntire, D-Seattle, said the Legislature also faces growing school and social and health service costs that could hit $100 million.

The new forecast by the state's chief economist, ChangMook Sohn, now projects that more than $26 billion in revenue in the next two fiscal years. That is up $492.9 million over the June forecast.

As Washington emerged from recession and the real estate boom began, the council has adjusted forecasts upward dramatically for the past three quarters in a row.

Previous increases were $450 million and $739 million, bringing the total increase to over $1.7 billion.

Lawmakers left town this spring with a skimpy $200 million ending fund balance after boosting a variety of "sin taxes" by about $450 million. Now the forecast shows a reserve of $1.12 billion.

Sohn said the sizzling housing market is responsible for nearly half of the latest windfall. But he cautioned that the pace will soon start slowing to a more normal rate.

Soaring oil prices haven't noticeably affected consumer spending and the state economy, and gasoline pump prices haven't been much affected by the Katrina hurricane, he said.

The strike at Boeing could whack personal income figures by $100 million if it goes on for a month, but the latest forecast doesn't make any Boeing-related adjustment. Sohn still assumes that Boeing and the aerospace industry will expand by 6,000 workers both this year and next.