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Real Estate Inventories
 12 Months Ended
Dec. 31, 2013
Real Estate [Abstract]  
Real Estate Inventories
Real Estate Inventories

Real estate inventories consisted of the following (in thousands):

 
December 31, 2013
 
December 31, 2012
Deposits and pre-acquisition costs
$
4,517

 
$
2,177

Land held and land under development
117,808

 
110,463

Homes completed or under construction
46,639

 
9,441

Model homes
7,884

 
3,286

 
$
176,848

 
$
125,367



Model homes and homes completed or under construction include all costs associated with home construction, including land, development, indirect costs, permits and fees, and vertical construction. Land under development includes costs incurred during site development, such as land, development, indirect costs and permits. As of December 31, 2013, the Company had $3.7 million of deposits pertaining to land purchase contracts for 1,350 lots with an aggregate purchase price of approximately $87.9 million, net of deposits. As of December 31, 2012, the Company had $1.5 million of deposits pertaining to land purchase contracts for 258 lots with an aggregate remaining purchase price of approximately $20.1 million, net of deposits.

Interest Capitalization
 
Interest is capitalized on real estate inventories during development. Interest capitalized is included in cost of sales as related sales are recognized. For the years ended December 31, 2013, 2012 and 2011, interest incurred of $2.9 million, $1.9 million, and $1.7 million, respectively, was capitalized in each respective period. Amounts capitalized to home inventory and land inventory were as follows (in thousands): 

 
December 31,
 
2013
 
2012
 
2011
Interest expense capitalized as cost of home inventory
$
2,259

 
$
369

 
$
68

Interest expense capitalized as cost of land inventory
642

 
1,580

 
1,649

Total interest expense capitalized
2,901

 
1,949

 
1,717

Previously capitalized interest expense included in cost of sales - homebuilding
(1,174
)
 
(122
)
 
(35
)
Previously capitalized interest expense included in cost of sales - land development
(9
)
 
(638
)
 
(476
)
Net activity of capitalized interest
1,718

 
1,189

 
1,206

Capitalized interest expense in beginning inventory
4,620

 
3,431

 
2,225

Capitalized interest expense in ending inventory
$
6,338

 
$
4,620

 
$
3,431