Real Estate Inventories and Capitalized Interest

9 Months Ended

Sep. 30, 2015

Real Estate Inventories and Capitalized Interest

Real estate inventories are summarized as follows:



	September 30,		December 31,
	2015		2014
	(Dollars in thousands)
Deposits and pre-acquisition costs	$	10,857	$	9,349
Land held and land under development	57,480		48,990
Homes completed or under construction	139,797		87,072
Model homes	39,934		18,153
	$	248,068	$	163,564

All of our deposits and pre-acquisition costs are non-refundable, except for $0.4 million and $0 as of September 30, 2015 and December 31, 2014, respectively.

Model homes, homes completed, and homes under construction include all costs associated with home construction, including land, development, indirects, permits, materials and labor. Land held and land under development includes costs incurred during site development such as land, development, indirects, and permits.

Interest is capitalized to inventory during development and other qualifying activities. Interest capitalized as a cost of inventory is included in cost of sales as related homes are closed. For the three and nine months ended September 30, 2015 and 2014 interest incurred, capitalized and expensed was as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(Dollars in thousands)
Interest incurred	$	1,369		$	534		$	3,295		$	1,079
Interest capitalized	(1,369		)	(534		)	(3,295		)	(1,079		)
Interest expensed	$	—		$	—		$	—		$	—

Capitalized interest in beginning inventory	$	3,510		$	1,495		$	2,328		$	1,003
Interest capitalized as a cost of inventory	1,369			534			3,295			1,079
Contributions to unconsolidated joint ventures	—			—			(264		)	—
Interest previously capitalized as cost of inventory, included in cost of sales	(396		)	(65		)	(876		)	(118		)
Interest previously capitalized as cost of inventory, included in other expense	$	(39	)	$	—		$	(39	)	$	—
Capitalized interest in ending inventory	$	4,444		$	1,964		$	4,444		$	1,964