In the process of updating some older charts, I stumbled across this gem, and couldn't resist posting it. It shows the inflation-adjusted price of existing single-family homes, and very clearly depicts the "bubble" in housing prices which began around 1997 (when Clinton cut the capital gains tax on home appreciation), and the deflating of that bubble which is now complete, with prices having fallen fully 39%—in real terms—from their 2005 high.
But maybe you think that prices will have to go all the way back to 1968 levels, in which case there is still another 20% decline waiting in the wings.
As a counter to that, I would note that mortgage rates today are lower than they were in 1968, and real personal incomes have increased 250% since then. Do housing prices really need to decline further? I seriously doubt it—prices are incredibly cheap by almost any measure you care to come up with. The bubble has popped, and it's time to think about how much it might inflate again.