Quarterly report pursuant to Section 13 or 15(d)

Real Estate and Capitalized Interest (Tables)

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Real Estate and Capitalized Interest (Tables)
6 Months Ended
Jun. 30, 2014
Inventory Disclosure [Abstract]  
Real estate properties
Real estate consists of the following (in thousands):
 
At June 30, 2014
 
At December 31, 2013
Homes under contract under construction (1)
$
370,626

 
$
262,633

Unsold homes, completed and under construction (1)
182,719

 
147,889

Model homes (1)
91,509

 
81,541

Finished home sites and home sites under development
890,036

 
813,135

Land held for development (2)
51,012

 
52,100

Land held for sale
28,267

 
19,112

Communities in mothball status (3)
23,859

 
28,889

 
$
1,638,028

 
$
1,405,299

 
(1)    Includes the allocated land and land development costs associated with each lot for these homes.
(2)
Land held for development primarily reflects land and land development costs related to land where development activity is not currently underway but is expected to begin in the future. For these parcels, we may have chosen not to currently develop certain land holdings as they typically represent a portion of a larger land parcel that we plan to build out over several years.
(3)
Represents communities where we have decided to cease operations (mothball) as we have determined that their economic performance would be maximized by deferring development. In the future, some of these communities may be re-opened while others may be sold to third parties. If we deem our carrying value to not be fully recoverable, we adjust our carrying value for these assets to fair value at the time they are placed into mothball status. As of June 30, 2014, we had four mothballed communities with a carrying value of $21.1 million in our West Region and one mothballed community with a carrying value of $2.8 million in our Central Region. We do not capitalize interest for such mothballed assets, and all ongoing costs of land ownership (i.e. property taxes, homeowner association dues, etc.) are also expensed as incurred.
Summary of capitalized interest
A summary of our capitalized interest is as follows (in thousands):
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Capitalized interest, beginning of period
$
38,701

 
$
24,198

 
$
32,992

 
$
21,600

Interest incurred
14,382

 
12,642

 
28,638

 
25,368

Interest expensed
(1,396
)
 
(4,523
)
 
(4,109
)
 
(9,651
)
Interest amortized to cost of home and land closings
(7,332
)
 
(6,023
)
 
(13,166
)
 
(11,023
)
Capitalized interest, end of period (1)
$
44,355

 
$
26,294

 
$
44,355

 
$
26,294

 
(1)
Approximately $511,000 of the capitalized interest is related to our joint venture investments and is a component of “Investments in unconsolidated entities” on our consolidated balance sheets as of June 30, 2014 and December 31, 2013.