A jittery market forced shares in KB Home down more than 3 percent Monday despite the home builder’s announcement it is renewing its successful partnership with Martha Stewart Living Omnimedia.

KB plans to build its first Martha Stewart branded homes in Los Angeles County in a 97-unit Lancaster subdivision to be called KB Home Terreno Vista. The development, which will be built adjacent to the National Soccer Center, is scheduled to open in fall 2007.

This marks the second agreement to build Martha Stewart homes in California and marks the eighth development the two companies have partnered on. The first California homes were built in Perris just outside of Temecula. KB has reported fast homes sales in the developments.

The Los Angeles homebuilder said that the Terreno Vista homes will feature designs similar to traditional Northeastern homes found in Maine and New York. The one- and two-story homes will range from 1,875 to 2,968 square feet and start in the low $300,000.

Shares in KB Home were down $1.43, or 3 percent, to $44.56 in afternoon trading Tuesday on the New York Stock Exchange.