Real Estate Inventories and Capitalized Interest

6 Months Ended

Jun. 30, 2016

Real Estate Inventories and Capitalized Interest

Real estate inventories are summarized as follows:



	June 30,		December 31,
	2016		2015
	(Dollars in thousands)
Deposits and pre-acquisition costs	$	36,373	$	17,133
Land held and land under development	60,773		57,659
Homes completed or under construction	235,492		109,805
Model homes	70,740		25,321
	$	403,378	$	209,918

All of our deposits and pre-acquisition costs are non-refundable, except for $0.1 million and $0.5 million as of June 30, 2016 and December 31, 2015, respectively.

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

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 six months ended June 30, 2016 and 2015 interest incurred, capitalized and expensed was as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(Dollars in thousands)
Interest incurred	$	1,689		$	1,048		$	2,970		$	1,926
Interest capitalized	(1,689		)	(1,048		)	(2,970		)	(1,926		)
Interest expensed	$	—		$	—		$	—		$	—

Capitalized interest in beginning inventory	$	4,823		$	2,847		$	4,190		$	2,328
Interest capitalized as a cost of inventory	1,689			1,048			2,970			1,926
Contribution to unconsolidated joint venture	—			(264		)	—			(264		)
Previously capitalized interest included in cost of sales	(1,063		)	(121		)	(1,711		)	(480		)
Capitalized interest in ending inventory	$	5,449		$	3,510		$	5,449		$	3,510