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BREAKING: KB Home to exit Indianapolis market

July 10, 2007

KB Home Inc. is pulling out of the Indianapolis market, a spokesman for the Los Angeles-based homebuilder confirmed this afternoon.

The company was the fourth-biggest homebuilder in the Indianapolis area in 2005, ranked by permits filed, according to IBJ's Book of Lists. However, in recent quarters the housing slowdown has taken a toll on it and other local players. In 2006, KB delivered 585 homes in central Indiana, down from 667 in 2005.

KB entered the Indiana market in mid-2004 with its purchase of locally based Dura Builders Inc.

All local KB jobs will be eliminated between now and the end of the year, as the company completes its backlog of orders, spokesman Jason Lindaman said. He declined to provide a local employee count. Lindaman said that the existing 10-year warranty on KB homes will remain valid.

"We're not picking up and moving out," Lindaman said. "This will take months." A lot of employees will be offered transfers to Chicago and elsewhere, he added.

The number of residential building permits issued in central Indiana has tumbled over the past two years. There were 13,202 permits issued in 2005, but only 9,514 last year, according to the Builders Association of Greater Indianapolis. So far this year, just 3,822 have been issued.

Many areas of the country have seen even larger declines. The national slump has walloped KB shares. They were trading today at a 52-week low and are down 30 percent for the year.

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