The inflated prices that various assets had at the height of the bubble were "true values" in the sense that their owners could sell them (or, more importantly, put them up as collateral for loans) for those values. Someone who bought a house at the top of the market, lost their job, and is now trying to sell their house so they can move to somewhere more affordable, is certainly feeling a real loss right now.
I guess by "true value", I mean the value that assets would have had absent the housing-bubble induced speculative premium.
My best estimate for this quantity: let gamma = (historical price to own)/(historical price to rent), with "historical" meaning pre-1995. Gamma was more or less constant up until the housing bubble.
I'm guessing the "true value" of a house was in the neighborhood of gamma x (price to rent).
The inflated prices that various assets had at the height of the bubble were "true values" in the sense that their owners could sell them (or, more importantly, put them up as collateral for loans) for those values. Someone who bought a house at the top of the market, lost their job, and is now trying to sell their house so they can move to somewhere more affordable, is certainly feeling a real loss right now.