It did seem that the Xia dynasty was mythological rather as we do not know the real origins of Hansel and Gretel for the story has been told and re told for centuries. This is even more the case with the ancient dynasties of China.
But recently, archaeologists found bone matter that evidenced the reality of the Shang dynasty, which followed the Xia. Therefore, it is now accepted that the Xia dynasty did really exist.
No evidence has been found for the Xia dynasty to the best of my knowledge but because it has been in the oral history of the Chinese to the same extent as the Shang dynasty, and definite archaeological evidence was found for this in 1899, then it does seem possible that the Xia dynasty did exist.
There are vast tracts of China that have not been investigated and may hold bones and artefacts. With global warming, watery areas drying up can reveal matter that has lain undisturbed for many centuries.