Quarterly report pursuant to Section 13 or 15(d)

REAL ESTATE AND CAPITALIZED INTEREST

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REAL ESTATE AND CAPITALIZED INTEREST
6 Months Ended
Jun. 30, 2018
Inventory Disclosure [Abstract]  
REAL ESTATE AND CAPITALIZED INTEREST
REAL ESTATE AND CAPITALIZED INTEREST
Real estate consists of the following (in thousands):
 
 
As of
 
 
June 30, 2018
 
December 31, 2017
Homes under contract under construction (1)
 
$
715,373

 
$
566,474

Unsold homes, completed and under construction (1)
 
562,435

 
516,577

Model homes (1)
 
138,441

 
142,026

Finished home sites and home sites under development (2)
 
1,453,798

 
1,506,303

Total
 
$
2,870,047


$
2,731,380



(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, less impairments, if any. 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.
Subject to sufficient qualifying assets, we capitalize our development period interest costs incurred in connection with our real estate development and construction activities. Capitalized interest is allocated to active real estate when incurred and charged to cost of closings when the related property is delivered. A summary of our capitalized interest is as follows (in thousands):
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Capitalized interest, beginning of period
$
81,828

 
$
70,885

 
$
78,564

 
$
68,196

Interest incurred
21,374

 
19,280

 
42,243

 
37,175

Interest expensed
(44
)
 
(1,620
)
 
(180
)
 
(2,445
)
Interest amortized to cost of home and land closings
(18,715
)
 
(16,218
)
 
(36,184
)
 
(30,599
)
Capitalized interest, end of period
$
84,443

 
$
72,327

 
$
84,443

 
$
72,327