Not to mention the government has already displayed that they will allow overall market manipulation to prevent a foreclosure inventory glut that will crash or severely depreciate housing markets.

Pointing you to East Coast markets that are getting glutted with foreclosures and shorts again after a hiatus. IMHO, same thing may occur in CA — combination of rise in interest rates and new foreclosures coming online after banks “learning” to foreclose/going through proper motions under the CA Homeowners’ Bill of Rights. The government will only act on the national market. Individual markets are easily subject to 10-20% fluctuations, and CA is ripe for it after the run up of the last year. Not a crash, but a 10-20% correction. As happened once already ca. 2010-11, after the homeowners’ credit and the foreclosure moratorium expired.