Owned Inventory

12 Months Ended

Sep. 30, 2024

The components of our owned inventory are as follows as of September 30, 2024 and 2023:


in thousands	September 30, 2024		September 30, 2023
Homes under construction	$	754,705	$	644,363
Land under development	1,023,188		870,740
Land held for future development	19,879		19,879
Land held for sale	19,086		18,579
Capitalized interest	124,182		112,580
Model homes	99,600		90,062
Total owned inventory	$	2,040,640	$	1,756,203

Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including costs of the underlying lot, direct construction costs and capitalized indirect costs. As of September 30, 2024, we had 2,315 homes under construction, including 1,154 spec homes totaling $360.9 million (827 in-process spec homes totaling $231.4 million, and 327 finished spec homes totaling $129.5 million). As of September 30, 2023, we had 2,163 homes under construction, including 779 spec homes totaling $218.0 million (645 in-process spec homes totaling $162.0 million, and 134 finished spec homes totaling $56.0 million).

Land under development consists principally of land acquisition, land development and other common costs. These land related costs are allocated to individual lots on a pro-rata basis, and the lot costs are transferred to homes under construction when home construction begins for the respective lots. Certain of the fully developed lots in this category are reserved by a customer deposit or sales contract.

Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable carrying costs, such as interest and real estate taxes, are expensed as incurred.

Land held for sale includes land and lots that do not fit within our homebuilding programs or strategic plans in certain markets, and land is classified as held for sale once certain criteria are met (refer to Note 2). These assets are recorded at the lower of the carrying value or fair value less costs to sell (net realizable value).

The amount of interest we are able to capitalize depends on our qualified inventory balance, which considers the status of our inventory holdings. Our qualified inventory balance includes the majority of our homes under construction and land under development but excludes land held for future development and land held for sale (see Note 5 for additional information on capitalized interest).

Total owned inventory by reportable segment is presented in the table below as of September 30, 2024 and 2023:


in thousands	Projects in Progress (a)		Land Held for Future Development		Land Held for Sale		Total Owned Inventory
September 30, 2024
West	$	1,023,140	$	3,483	$	17,110	$	1,043,733
East	411,914		10,888		1,300		424,102
Southeast	365,676		5,508		676		371,860
Corporate and unallocated(b)	200,945		—		—		200,945
Total	$	2,001,675	$	19,879	$	19,086	$	2,040,640
September 30, 2023
West	$	914,908	$	3,483	$	14,702	$	933,093
East	325,395		10,888		3,201		339,484
Southeast	297,142		5,508		676		303,326
Corporate and unallocated(b)	180,300		—		—		180,300
Total	$	1,717,745	$	19,879	$	18,579	$	1,756,203

(a) Projects in progress include homes under construction, land under development, capitalized interest, and model home categories from the preceding table.

(b) Projects in progress amount includes capitalized interest and indirect costs that are maintained within our Corporate and unallocated segment.

Inventory Impairments

The following table presents, by reportable segment, our total impairment and abandonment charges for the periods presented:


	Fiscal Year Ended September 30,
in thousands	2024		2023		2022






Land Held for Sale:
West	$	—	$	—	$	1,303


Corporate and unallocated(a)	—		—		565
Total impairment charges on land held for sale	$	—	$	—	$	1,868
Abandonments:
West	$	1,805	$	487	$	289
East	91		154		143
Southeast	100		—		663

Total abandonments charges	$	1,996	$	641	$	1,095






Total impairment and abandonment charges	$	1,996	$	641	$	2,963

(a) Amount represents capitalized interest and indirects balance that was impaired. Capitalized interest and indirects are maintained within our Corporate and unallocated segment.

Projects in Progress Impairments

We assess our projects in progress inventory for indicators of impairment at the community level on a quarterly basis. If indicators of impairment are present for a community with more than ten homes remaining to close, we perform a recoverability test by comparing the expected undiscounted cash flows for the community to its carrying value. If the aggregate undiscounted cash flows are in excess of the carrying value, the asset is considered to be recoverable and is not impaired. If the carrying value exceeds the aggregate undiscounted cash flows, we perform a discounted cash flow analysis to determine the fair value of the community, and impairment charges are recorded if the fair value of the community's inventory is less than its carrying value.

No project in progress impairments were recognized during the fiscal years ended September 30, 2024, 2023 and 2022.

Land Held for Sale Impairments

Impairments on land held for sale generally represent write downs of these properties to net realizable value based on sales contracts, letters of intent, current market conditions and recent comparable land sale transactions, as applicable. Absent an executed sales contract, our assumptions related to land sales prices require significant judgment because the real estate market is highly sensitive to changes in economic conditions, and our estimates of sale prices could differ significantly from actual results.

No land held for sale impairment charges were recognized during the fiscal years ended September 30, 2024 and 2023. During the fiscal year ended September 30, 2022, we recognized $1.9 million land held for sale impairment charges related to two held for sale communities in the West segment. The fair value of land held for sale inventory is measured on a nonrecurring basis and has been determined using unobservable inputs (Level 3). The impairment-date fair value of land held for sale assets that were impaired during the fiscal year ended September 30, 2022 was $0.9 million. Refer to Note 9 for further discussion on fair value measurements and fair value hierarchy.

Abandonments

From time to time, we may determine to abandon lots or not exercise certain option agreements that are not projected to produce adequate results or no longer fit with our long-term strategic plan. Additionally, in certain limited instances, we are forced to abandon lots due to seller non-performance, permitting or other regulatory issues that do not allow us to build on those lots. If we intend to abandon or walk away from a property, we record an abandonment charge to earnings for the non-refundable deposit amount and any related capitalized costs in the period such decision is made. During the fiscal years ended September 30, 2024, 2023 and 2022, we recognized $2.0 million, $0.6 million and 1.1 million in abandonment charges, respectively. As we grow our business in the years ahead, the dollar value of abandonment charges may also grow.