Kelman said the housing market is a frenzy, with most houses selling above the asking prices, which has never happened before. 

After record gains in the first quarter, some home prices are likely to stall. 

Nationwide, the median existing-home sales price rose 16.2% in the first quarter to $319,200, a record high in data going back to 1989, according to the National Association of Realtors.

We recently reported that home sales prices in the country's hottest markets had risen by their widest level since 2006, according to the Case-Shiller Home Price Index, a closely watched measure of home prices in the US which offers a breakdown by region, as well as nationally. According to Case-Shiller, US home prices in 20 major cities are up a shocking 11.10% year-over-year.

But outside the major metro markets, demand was even more robust, translating into the most significant YoY increase in median sales since 2006.

So back to Kelman, who told Pellegrini that people placing bids well over the asking price might find their loan denied because the appraisal level will come in so much lower than what the house is worth. 

Kelman warned: "I think you're going to see a little bit of air come out of the ballon," referring to the housing market bubble the Federal Reserve engineered by sending mortgage rates to record lows at the start of the virus pandemic in 2020.