“In a free market, buyers are free to overpay, are they not?”
In this case it only affects the young and middle class in California who are trying to buy a house. What if in your case it affected the price of fuel, medicine or food? China floods our markets with cheap products made by underpaid workers while destroying their nation’s environment. When the sh!t hits the fan they will just move over here.
Everyone has to decide whether they would prefer government intervention over whatever the market chooses to do. I know where I stand.