If the government creates a law that kills a chunk of the demand, that's manipulation, not free market economics. So, "fair value" means what?
The true value (which is also the "fair value", if there is such a thing) of all housing units currently on the market is far, far below the sum of all the asking prices - or else they would all be sold.
Therefore the answer is to destroy empty housing stock and let the banks write them off. What you envision is not a return to "fair value"; what you envision is a runaway freight train plunging off a five-hundred foot bridge into a chasm of no return; because that is what will take place in our economy if values fall much further. You're talking generational disruption of the economy and circumstances that lead to the wrong kind of political instability.
That's not even economics - that's simple English.
If the real estate situation doesn't stabilize soon, the future will involve neither economics nor simple English.
I believe there truly are some in the conservative movement that secretly hope for such a post-apocolyptic society, for reasons I can’t understand.
It reminds me of the “end-timers” as I call them...people so convinced of their own salvation that they WANT to die and the world to end with them so they can get to heaven.