Google is going nuts with another rumor today that suggests the search giant is looking to expand into real estate search with Trulia, a Silicon Valley startup that has been successful in gaining momentum in this space despite the downturn in housing. Google is serious about expanding into this market and may pay a premium on $150M-$200M where Trulia is actively valued, BoomTown reports.

Turlia has raised $33M from Accel Partners and Sequoia Capital since 2005 and generates revenue through advertising and lead-generation. Google also looked at Zillow, another, larger competitor to Trulia, but stayed away due to Trulia’s lower valuation and its deep integration with Google Maps and HQ in the Bay Area, sources suggest. Google is clearly set to dominate after the downtown in all search markets – horizontal and vertical.