Thirteen offers. In less than two weeks. This was not the subdued housing market I had been expecting.

Like many opportunistic Americans, I decided recently that it’s a terrific time to buy a home. The housing bust seems to have ended yet prices are still far below peak levels of 2006. Interest rates are close to record lows. My calculations showed I ought to be able to buy a decent place with after-tax monthly payments comparable to what I pay as a renter living outside New York City.

I looked around for a while, discovering what “low inventory” means: The good properties attract a lot of interest because there aren’t many of them. After watching a couple of appealing homes sell fairly quickly, I placed my own bid on a fixer-upper with “good bones” in a great neighborhood. On my agent’s advice, I went against my instincts and even offered $20,000 more than the list price.

I lost the bid. A dozen others bid on the same house in an auction held to accommodate all the offers. My agent shrugged it off as the latest evidence of a “crazy market” but it made me wonder if I was participating in a new housing bubble.

'A distortion of the marketplace'

Real-estate experts are starting to wonder the same thing, as prices rise by double-digits in some markets, and other signs of a frenzy develop. “I’m definitely concerned about the potential for an emerging housing bubble,” says Stan Humphries, chief economist for research firm Zillow (Z). “We’re seeing a distortion of the marketplace.”

Economists generally agree the housing bust is over but they’re split on how robust the recovery will be. Several indicators are quite encouraging. Sales of existing homes recently hit the highest level since 2009, while permits for new construction are running at the highest rate since the summer of 2008. Home Depot (HD), which sells more appliances and home-improvement supplies as housing heats up, reported runaway first-quarter earnings. Stock prices for homebuilders such as Ryland (RYL), KB Homes (KBH) and DR Horton (DHI) have risen by more than 25% so far this year.

Still, it’s nothing like a normal housing market. The recovery has been fueled by artificially low interest rates engineered by the Federal Reserve, and virtually all new mortgages these days are underwritten by the back-from-the-dead federal agencies Fannie Mae and Freddie Mac. Strict underwriting standards have left many people with less-than-stellar credit unable to get loans.

Worse, more than one-quarter of all homeowners with a mortgage are still “underwater” on their homes, owing more than the property is worth. Since those people would lose money if they sold their homes, they tend to keep them off the market, which constricts the supply of homes and pushes up prices for those that are on the market. Homeowners with negative equity also find it difficult to downsize to save money, or move to an area where job prospects are better. In that way, the housing bust is still holding back the overall economy.