Investors hold on to your hats, the US may be headed for another crisis with eerie echoes of the last one. Just like in the run up to the Financial Crisis, there has been a big explosion of spending in real estate. In particular, developers have built over one million apartments in the US. Now, the big banks that funded all that development with loans are getting worried the market has become overstretched. The Fed is now doing more rigorous stress tests to see how banks would respond to a 35% drop in commercial real estate prices. The big worry is over “trendy” metropolitan apartment buildings, which have seen sharp price rises. Regulations put in place after the Crisis have incentivized builders to go into commercial real estate rather than residential, as have demographic trends like Millennials’ preference to live downtown rather than in the suburbs. JP Morgan has been far and away the biggest lender for apartment building construction.