Another Fortune piece on the housing bubble. "The most troubled sector of the housing market, the one that will fall first and fastest, is the condominium market. Typically cheaper than houses and easier to buy, sell or rent out, condos are catnip for investors. 'I estimate that 80 percent of the sales in Miami went to investors at the peak of the market,' says Lewis Goodkin, a consultant to condo developers."

"Gary Bahadur, who owns a computer networking company in Los Angeles, bought six condos in California over the past few years. Now he's putting them all up for sale. 'I'm getting out of California because it's topped out,' he says, 'The prices are so high that investors can no longer buy a condo and rent it to cover the mortgage.'"

"Yet even as speculators flee, developers keep throwing up condos at a breakneck pace, in part because if they have already bought the land and poured the foundation, they have no choice but to finish the project. In the Miami area 25,000 new units are under construction, and another 25,000 are approved. Yet the Miami market absorbed only 10,500 new condos in the past decade."

"Tanya Wagner is caught in the squeeze. She paid $335,000 for a two-bedroom condo when she moved to Miami in 2004. In November she put her unit on the market for $485,000, the price that apartments in her building had sold for a few months earlier. But Wagner missed the peak. She's now dropped her price to $415,000, and she still hasn't had an offer. 'My belief is that prices will drop even more,' she says."

"Builders don't have the luxury of waiting out a slump; they need to sell for what they can get. At first they hold the line on base prices by offering incentives. Then, as unsold units collect, they move merchandise with huge discounts."

"Builders also pitch in when potential customers are having trouble unloading their current home. Pedro Kritselis had to sell his house to afford to buy a new one in Bristow, Va. But the market is so soft that he couldn't get the price he needed, so he told the builder he'd have to walk away. To keep the sale, the developer shaved $25,000 from the price of the new house. That enabled Kritselis to sell his house for $25,000 less and still afford the new home.'

"Delinquencies are already rising rapidly. Since early 2005, delinquency rates have jumped almost 14 percent, to 2.5 percent for prime mortgage loans. 'The banks will be forced to take back a lot of properties and sell them for the amount of the loan,' says (economist) Mark Zandi. 'That will add to the already huge supply on the market.'"

"As painful as it will be for many people, the looming correction may turn out to be welcome news for young couples now priced out of the market will once again be able to buy a ranch or colonial without forking over half their income for mortgage payments. Lauris Lambergs and his wife, Ginta, want to move from a condo in South Boston to a single family home."

"'Now the buyers have some leverage. When we go to open houses, we're the only ones all day!' exults Lauris. It's the bright side of our gloomy outlook: The bargains are coming."