- The Washington Times - Saturday, March 29, 2008

LOS ANGELES (AP) — KB Home, one of the nation’s biggest residential builders, said yesterday that it posted a loss of more than $268 million in its first quarter as weak home sales amid a worsening housing market forced the company to take a large write-down related to falling prices.

Jeffrey Mezger, KB Home’s president and chief executive officer, said a growing supply of unsold new and existing houses on the market, tight mortgage lending and industrywide discounting drove down sale prices and compressed margins during the quarter.

That forced the builder to take impairment charges and walk away from land-option contracts.

“Until prices stabilize and consumer confidence returns, we believe inventory levels will remain significantly out of balance with demand,” Mr. Mezger said in a statement. “We do not anticipate meaningful improvement in these conditions in the near term, as it is likely to take some time for the market to absorb the current excess housing supply and for consumer confidence to improve.”

In a conference call with analysts, Mr. Mezger did note that recent figures from the National Association of Realtors showing the median price of a resale home declined 8.2 percent last month boded well for the company.

“Our biggest competitor is the resale market, and a drop in price of this magnitude could clear the overhang of inventory more quickly and lead to price stability earlier rather than later,” Mr. Mezger said.

For the quarter that ended Feb. 29, the Los Angeles-based company posted a loss of $268.2 million ($3.47 per share), compared with a profit of $27.6 million, (34 cents), a year earlier.

The latest period included a charge of $223.9 million in write-downs related to falling house prices.

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