In Rainer Mortgage v. Silverwood, Ltd., 163 Cal.App. 3d 359 (1985), the court held that a court should attempt to determine the "intrinsic value" of property, disregarding, in that case, the fact that the one year right of redemption following judicial foreclosure depresses the marketability of property.

     The 'fair value' of foreclosed property is thus its intrinsic value.
Under normal conditions, this intrinsic value will often coincide
with its fair market value; the value a willing purchaser will
pay to a willing seller in an open market. . . . [T]he right of
redemption is limited to a year. After that time, it no longer serves
to depress the marketability of the property. Accordingly, we
conclude the Legislature intended that 'fair value' . . . be construed
as the intrinsic value of real property subject to judicial foreclosure,
taking into consideration all the circumstances affecting the
underlying worth of the property at the time of the sale, without
consideration of the impact of foreclosure proceedings on this value.

     We don't think there is such a thing as the "intrinsic value" of a piece of property. Property is worth whatever it sells for in the context in which it is being sold. The court could have reached the same result by simply asking what the property would sell for in the open market, in a voluntary sale rather than in a foreclosure sale.