This is a partial transcript from "Your World with Neil Cavuto," June 23, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: The nation's homebuilders are keeping a very close eye on the latest economic data. Mortgage rates (search) inching rather, 30-year fixed rate mortgages now at 5.57 percent. Home prices continue to rocket higher, just in the month of May, up 12.5 percent, the national average now more than $207,000, which gets you a closet in Manhattan.

But there are signs that the housing boom may be cooling down. Existing home sales (search) did dip a little bit last month. But, but, but, they're the second highest on record.

Is now the time to sell your home, cash out, or rent, what? It is the question everyone's asking, as the media keeps talking about that "B-word" — bubble.

With us now from Denver is Daryl Jesperson. He is the CEO of RE/MAX (search). And here in New York, Jim Gillespie. Jim is the CEO of Coldwell Banker (search).

Mr. Gillespie, to you first. You have heard the bubble talk.

JIM GILLESPIE, CEO, COLDWELL BANKER: I have heard the bubble talk. And there is not going to be a national bubble. There has not been since 1950. Prices have risen.

CAVUTO: There have been regional bubbles.

GILLESPIE: There's been region bubbles. But my concern with all the bubble stuff, the talk that goes on, there's two groups of consumers that are really being hurt.

One group is first-time homebuyers that are looking at these headlines and putting off purchasing a home, saying they are going to sit on the sidelines. And if they thought this or heard this two or three years ago, they would have lost out 50 percent, 60 percent appreciation.

And then there's now a group that I'm reading. Last week in USA Today, they identified a couple in Connecticut that sold their home because they thought prices are going to go down, took out their $128,000 worth of equity and are renting an apartment for $2,900. So, they are paying $35,000 to their landlord and getting no tax benefits.

CAVUTO: Well, obviously, they are afraid there is going to be a crash, right?

GILLESPIE: Well, they are afraid there is going to be a crash. But the definition of a bubble, Neil, is a massive oversupply of homes, coupled with massive job losses. And the exact opposite is the case in this country.

CAVUTO: Daryl?

DARYL JESPERSON, CEO, RE/MAX INTERNATIONAL: The other part is that a bubble refers more to when the Nikkei was overpriced by 80 percent or the Nasdaq by 60 percent. We don't have that in the housing market.

CAVUTO: Wait a minute. If you look at Florida in the West Palm Beach area and you look at appreciation of 35, 40 percent, each year over the last three or four years, some, not all, some might argue that's a bit heady.

JESPERSON: What happens, though, is that the real estate market heats up. It accelerates. It gets up to an unsustainable level. The buyers are no longer interested. And they back out of the market because they have been priced out of the market. You have a plateauing of the prices, maybe even a little softening of the prices, particularly in the higher end.

CAVUTO: Just a little softening? Just a little?

JESPERSON: And then it takes off. That's correct.

CAVUTO: OK. Just a little?

JESPERSON: For one thing, in a piece of stock, it is a piece of paper, whereas, with a house, you have labor, you have materials, you have landscaping.

CAVUTO: And, presumably, people live in it.

But here's what worries me, Jim. And I will just play devil's advocate here.

GILLESPIE: Sure.

CAVUTO: That people are flipping properties, people are buying properties sight unseen and then selling them sight unseen. That does seem very Internet-y to me.

GILLESPIE: Well, I'm against flipping.

CAVUTO: But people are doing it.

GILLESPIE: Yes. People are going to be doing it, but we're getting more press. But the percentage of people doing it is still very, very small, Neil.

According to the National Association of Realtors, 3.7 percent of the people that purchase homes purchase it with the intent to flip within a year.

CAVUTO: What do you make of people, though, who take out second mortgages to buy additional homes?

GILLESPIE: Well, again, that all depends on their particular situation. And I would need take a look at their individual situation.

I am not going to blanket say that it's not the right thing to do.

CAVUTO: Would you do it?

GILLESPIE: Would I do it? Well, my personal situation, yes, I could afford to do it. And I have owned real estate for 30 years. So, I think it is the best investment. And I've always said it's the best investment you can make.

CAVUTO: Yes. Daryl, what do you think?

JESPERSON: The other fact that people seem to ignore is the fact that we have got aging baby boomers that have looked at their returns in the stock market over the last five years, have compared those to the two returns that they have had in real estate. And they are saying, hey, maybe it's time to buy a second property, that vacation home that we have always wanted.

CAVUTO: Who is going to buy their properties, though? When they retire, who is going to buy their stuff?

JESPERSON: Well, they need to be in a house, just like everybody else. They need their own security. But many, many people are owning a vacation property, an investment property, and their primary residence.

CAVUTO: Not the end of the world?

JESPERSON: I don't believe so. Not even close.

CAVUTO: Guys, thank you. I know where you come from. It's your business. But you expressed it very well.

(LAUGHTER)

JESPERSON: Of course.

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