Warranty Costs

Warranty reserves for houses are established to cover estimated costs for materials and labor with regard to warranty-type claims to be incurred subsequent to the closing of a house. Reserves are determined based on historical data and other relevant factors. We may have recourse against subcontractors for claims relating to workmanship and materials. Warranty reserves are included in Accrued and Other Liabilities in the consolidated balance sheets.

During the six and three months ended June 30, 2011 and 2010 changes in the warranty reserve consisted of the following:

	Six Months						Three Months
	2011			2010			2011			2010
Accrued warranty reserve, beginning of period	$	477		$	458		$	451		$	397
Estimated warranty expense		171			257			97			174
Amounts charged against warranty reserve		(226	)		(231	)		(126	)		(87	)
Accrued warranty reserve, end of period	$	422		$	484		$	422		$	484