Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2020
Inventory Disclosure [Abstract]  
Real estate consists of the following (in thousands):
At December 31,
2020 2019
Homes under contract under construction (1) $ 873,365  $ 564,762 
Unsold homes, completed and under construction (1) 357,861  686,948 
Model homes (1) 82,502  121,340 
Finished home sites and home sites under development (2) (3) 1,464,311  1,371,311 
$ 2,778,039  $ 2,744,361 
(1)Includes the allocated land and land development costs associated with each lot for these homes.
(2)Includes raw land, land held for development and land held for sale. 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 or phases of a larger land parcel that we plan to build out over several years. We do not capitalize interest for inactive assets, and all ongoing costs of land ownership (i.e. property taxes, homeowner association dues, etc.) are expensed as incurred.
(3)Includes land held for sale of $72.7 million and $36.6 million as of December 31, 2020 and 2019, respectively.

As previously noted, in accordance with ASC 360-10, each of our land inventory and related real estate assets is reviewed for recoverability when certain criteria are met, but at least annually, as our inventory is considered “long-lived” in accordance with GAAP. ASC 360-10 requires impairment charges to be recorded if the asset is not deemed recoverable and the fair value of such assets is less than their carrying amounts. Our determination of fair value is based on projections and estimates. We also evaluate alternative product offerings in communities where impairment indicators are present and other strategies for the land exist, such as selling or holding the land for sale. We recorded impairment charges of approximately $24.9 million and $7.3 million for the years ended December 31, 2020 and 2019, respectively. The majority of the impairment charges during the year ended December 31, 2020 are the result of upcoming dispositions of certain assets that no longer fit our strategy of entry-level and first move-up communities.
Subject to sufficient qualifying assets, we capitalize our development period interest costs incurred in connection with the development and construction of real estate. Capitalized interest is allocated to active real estate when incurred and charged to cost of closings when the related property is closed. A summary of our capitalized interest is as follows (in thousands):
  Years Ended December 31,
  2020 2019 2018
Capitalized interest, beginning of year $ 82,014  $ 88,454  $ 78,564 
Interest incurred 66,289  83,856  85,278 
Interest expensed (2,177) (8,370) (785)
Interest amortized to cost of home and land closings (87,186) (81,926) (74,603)
Capitalized interest, end of year (1) $ 58,940  $ 82,014  $ 88,454 
(1)Approximately $217,000, $279,000 and $454,000 of the capitalized interest is related to our joint venture investments and is a component of Investments in unconsolidated entities in our consolidated balance sheet as of December 31, 2020, 2019 and 2018, respectively.