economics. surprising you would use the word "inflated". it's a sellers market...that means there's more demand than supply so price in fact isn't "inflated" but rather rising sharply.
feds already said interest rate isn't going up anytime soon, and its more than likely the case. any rate hikes will crash the market. Trump wont allow that, Biden wont either because it would destroy his presidency. so if you think it's "inflated" it would be foolish to overbid. if you think prices are going to continue to rise then you should in fact overbid - especially if you believe supply will stay constricted. equity/real estates markets are going up because foreign money is pouring in and bonds are low.
with inflation, expect housing price to continue going up. and Congrats on the new house!