The American property market is once again looking bubbly

IVY ZELMAN knows a thing or two about the American housing market. She was rare among mainstream analysts in warning of trouble in 2005, a year before the bubble started to burst. In 2012, when many investors were reluctant to get back into property, she declared the sector had hit rock-bottom; prices have more than doubled since then. So it is worth paying attention to her latest pronouncements. “It’s euphoric right now,” she says. “There are definite signs of excess.”But Ms Zelman, who has gone from investment banks to running an analysis firm, also knows the current rally is different from past ones, which suggests the downside may be less severe. Start with the evidence of potential danger. Prices have surged in America since early in the pandemic, much as they have throughout the rich world. In recent months they have risen by nearly 20% year on year, eclipsing their heady pace before the global financial crisis of 2007-09.