There's no better sign of an economy on the mend than stupid money being thrown around like “rain” at a strip club.

We told you yesterday how home buyers last month put $5.39 billion in cash down on homes in what was the hottest July for residential real estate around Southern California in eight years. Now a report from home-buying site Trulia says SoCal is in the middle of an honest-to-goodness housing bubble. What does that mean?

It means that, only months out of this Great Recession (it officially ended in 2009, but it sure didn't feel like it), we're paying too much for houses.

Maybe way too much, depending on your opinion.

Trulia says Los Angeles home prices “relative to fundamentals,” i.e., other economic indicators, are being overvalued by at least 10 percent these days.

For Orange County, that “overvalued” figure is even greater: 12 percent.

In fact, the O.C. (No. 1) and L.A. (2) lead the nation's “bubble watch,” in the words of Trulia.

Credit: Trulia

Credit: Trulia

But things might level off a bit. Jed Kolko, the site's chief economist, writes:

The three factors that are contributing to the price slowdown — expanding inventory, rising mortgage rates and fading investor interest — aren't going away any time soon, which should put a cap on how much prices rise.

We'll see.

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