REAL ESTATE INVENTORY AND LAND DEPOSITS

9 Months Ended

Sep. 30, 2021

REAL ESTATE INVENTORY AND LAND DEPOSITSInventory consists of the following (in thousands):


	As of
	September 30, 2021		December 31, 2020
Real estate developed and under development	$	4,054,002	$	3,862,785
Real estate held for development or held for sale (1)	81,131		110,954
Operating communities (2)	1,530,074		1,072,134
Capitalized interest	180,560		163,780
Total owned inventory	5,845,767		5,209,653
Consolidated real estate not owned	58,429		122,773
Total real estate inventory	$	5,904,196	$	5,332,426

(1) Real estate held for development or held for sale includes properties which are not in active production. This includes raw land recently purchased or awaiting entitlement, and, if applicable, long-term strategic assets.

(2) Operating communities consist of all vertical construction costs relating to homes in progress and completed homes.

The development status of our land inventory is as follows (dollars in thousands):


	As of
	September 30, 2021			December 31, 2020
	Owned Lots	Book Value of Land and Development		Owned Lots	Book Value of Land and Development
Raw	6,114	$	238,088	7,032	$	239,554
Partially developed	21,610	1,375,501		19,495	1,215,419
Finished	21,853	2,413,178		21,396	2,388,177
Long-term strategic assets	—	—		158	13,462
Total homebuilding owned lots	49,577	4,026,767		48,081	3,856,612
Commercial assets	5,298	108,366		5,298	117,127
Total owned lots	54,875	$	4,135,133	53,379	$	3,973,739

Land Deposits — We provide deposits related to land options and land purchase contracts, which are capitalized when paid and classified as Land deposits until the associated property is purchased.

As of September 30, 2021 and December 31, 2020, we had the right to purchase 8,869 and 7,449 lots under land option purchase contracts, respectively, for an aggregate purchase price of $534.9 million and $485.4 million, respectively. We do not have title to the properties, and the creditors generally have no recourse against us. As of September 30, 2021 and December 31, 2020, our exposure to loss related to our option contracts with third parties and unconsolidated entities consisted of non-refundable deposits totaling $86.0 million and $65.3 million, respectively.

We also have various land banking arrangements. As of September 30, 2021 and December 31, 2020, we had the right to purchase 3,464 lots and 2,426 lots under such land agreements for an aggregate purchase price of $409.3 million and $275.0 million, respectively. We are not legally obligated to purchase the balance of the lots. As of September 30, 2021 and December 31, 2020, our exposure to loss related to deposits on land banking arrangements totaled $64.7 million and $60.3 million, respectively.

Capitalized Interest — Interest capitalized, incurred and amortized is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Interest capitalized - beginning of period	$	180,520	$	143,440	$	163,780	$	115,593
Interest incurred and capitalized	37,991		41,554		116,126		122,366
Interest amortized to cost of home closings	(37,951)		(34,321)		(99,346)		(87,286)
Interest capitalized - end of period	$	180,560	$	150,673	$	180,560	$	150,673