XML 19 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
Real Estate Inventory
6 Months Ended
Jun. 30, 2016
Inventory Disclosure [Abstract]  
Real Estate Inventory Disclosures
REAL ESTATE INVENTORY
Our real estate inventory consists of the following (in thousands):
 
 
June 30,
 
December 31,
 
 
2016
 
2015
Land, land under development, and finished lots
 
$
381,169

 
$
320,320

Sales offices
 
10,487

 
8,083

Homes in progress
 
138,747

 
109,451

Completed homes
 
79,522

 
93,374

Total real estate inventory
 
$
609,925

 
$
531,228


Inventory is stated at cost unless the carrying amount is determined not to be recoverable, in which case the affected inventory is written down to fair value.
Land, development and other project costs, including interest and property taxes incurred during development and home construction and net of expected reimbursements of development costs, are capitalized to real estate inventory. Land development and other common costs that benefit the entire community, including field construction supervision and related direct overhead, are allocated to individual lots or homes, as appropriate. The costs of lots are transferred to homes in progress when home construction begins. Home construction costs and related carrying charges are allocated to the cost of individual homes using the specific identification method. Costs that are not specifically identifiable to a home are allocated on a pro rata basis using either the lot size or relative sales value. Inventory costs for completed homes are expensed to cost of sales as homes are sold. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the remaining unsold lots and homes in the community on a pro rata basis.
The life cycle of a community generally ranges from two to five years, commencing with the acquisition of land, continuing through the land development phase, and concluding with the construction and sale of homes. A constructed home is used as the community sales office during the life of the community and then sold. Actual individual community lives will vary based on the size of the community, the sales absorption rate, and whether the property was purchased as raw land or finished lots.
Interest and financing costs incurred under our debt obligations, as more fully discussed in Note 4, are capitalized to qualifying real estate projects under development and homes in progress.