When you say California has never experienced a bubble burst, it is clear you haven't done any research.
For the most recent bubble burst, see Southern California RE from 1993 to 1998 or so. There were many other "adjustment" cycles previously as well.
But most never learn, and many profit incredibly from the high anyway--oftentimes enough to compensate for the inevitable low.
There is a difference between an adjustment and a bubble burst where the properties are seriously de-valued.