Bubble? What bubble?

The LA Times asks the most pertinent question about the housing bubble: How Low Can They Go? For anyone owning real estate in greater LA, the accompanying graphic must be rather terrifying:
How terrifying? Assuming a good 5% annual appreciation from 1988 (this is not inflation adjusted, after all) it looks to me like we should have had a median price of $352k in 2008... meaning the dropping won't be done before we hit a 30% decline. (Just 12% of that digested, so far.)

Oof.