"It's not a loss if you don't sell" is harmless for stocks, but has some negative externalities for real estate. REITs (Real Estate Investment Trusts) demonstrate the issue for commercial real estate where in order to lower the rent for a property the newest shareholders have to give up their shares. So instead of lowering the rent and recording a loss, junior shareholders would prefer to own a part of an empty lot hoping a business will come along and start renting.

Having millions of empty houses near millions of homeless people is a direct result of real estate owners trying to maximize the value of their assets. The solution to this would be to find a way to decommoditize housing, but that would never happen because that's socialism. Land value tax may be an easier jump to disincentive this inefficiency.