The prolonged housing downturn has claimed a new casualty, Chicago-based Kimball Hill Homes, a Sacramento and north San Joaquin Valley home builder since 1995.

The firm announced Tuesday it is going out of business.

The announcement came eight months after the privately held, medium-size builder filed for Chapter 11 bankruptcy protection. It builds houses in Sacramento, Rancho Cordova and Stockton.

"We're going to complete any homes that have been started," said company spokeswoman Anita-Marie Laurie. "If you are under contract to have a new home built and we have not begun construction, we will not be able to continue building it. Those people will get back their deposits."

Laurie said the business aims to liquidate its assets and shut down in 15 months. Ten-year warranties will be honored by third parties, she said.

Kimball Hill, founded in 1969 in suburban Chicago, is the newest corporate failure to rock a Sacramento-area building industry that has already seen several bankruptcies, division closings and massive layoffs as the housing market worsened in 2008.

New-home sales are believed to be at 20-year lows in the region. Home construction starts in California are the lowest since the state started keeping records in 1954, the building industry maintains.

"It's just a sad closing to a pretty long chapter. The conditions for housing right now are just brutal," said Mike Paris, former Sacramento division president for Kimball Hill. Paris recently became an executive with Sacramento-based Inter-Cal Real Estate Corp.

Kimball Hill sold 100 homes from January through October in Sacramento County. It ranks 16th for sales in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to consultant Hanley Wood Market Intelligence of Costa Mesa. The firm also built in Merced and Modesto.

"Their footprint is in areas that have been particularly hard hit by the downturn," said Dean Wehrli, vice president of consulting firm Sullivan Real Estate Advisors. "It's not uncommon. That's where all the new building was going on. That's where all the people were moving."

Nationally, Kimball Hill worked Sun Belt markets in California, Nevada, Texas and Florida, as well as Illinois. The firm ranked as the nation's 20th most successful builder in 2007, with 3,246 sales, according to Builder Online.

"I always thought of them as a good company, a little above average in terms of their products and homes," said Wehrli.

Tuesday's announcement capped a harsh year for the firm, which filed for bankruptcy protection in April, then lost its founder, David Hill, to cancer in July.

Hill addressed the North State Building Industry in November 2007, telling builders that 2008 could be a terrible year for the industry if economic conditions did not improve.

Other significant industry stumbles this year:

• Utah-based Woodside Homes, which had a major presence in the capital region, filed for Chapter 11 bankruptcy protection in September. Locally, it still ranks 18th for sales.

• John Rynen and Christo Bardis, owners of Mather-based Reynen & Bardis Communities, have each filed for personal bankruptcy protection. Rynen filed in April. Bardis followed in October. Their company's debts total nearly $1 billion.

• Granite Bay-based Dunmore Homes said in February it was liquidating assets and closing. Dunmore filed bankruptcy in November 2007.

• California highway contractor C.C. Meyers filed for personal bankruptcy protection in August over $40 million in debts related to his 1,200-acre Winchester Country Club residential project near Auburn.

• SunCal Bickford Ranch LLC filed for bankruptcy in November. The partnership on a 1,942-acre residential development near Penryn claimed it couldn't go forward or pay bills after the implosion of Wall Street investment bank Lehman Brothers.

Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.