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The phrase "we are overcrowded" is correct and usable in written English
It can be used to describe a situation where there are too many people or things in a particular space or area. Example: "Due to the influx of new students this semester, we are overcrowded in the classroom, making it difficult for everyone to participate."
Exact(1)
"We are overcrowded and have been stealing internal space to create classes, turning student lounges into classrooms and classroom into computer labs," she said.
Similar(57)
"We were overcrowded in Metuchen," explained Cindi Archambault, executive director of the Edison branch of what is now called the Metuchen/Edison/Woodbridge YMCA, "so we purchased some property from the J.C.C., an adjoining building".
"But we were overcrowded before and now we're at a comfortable size," St. Charles said.
"We are finding the railways are overcrowded.
"We're also supporting hospitals who, of course, are overcrowded with the injured".
Restaurants are overcrowded.
Schools are overcrowded.
Many services are overcrowded.
Both are overcrowded and overburdened.
A third of Latino households are overcrowded.
Only 6 percent of poor households are overcrowded.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com