Quarterly report pursuant to Section 13 or 15(d)

Real Estate Inventories

v3.22.2.2
Real Estate Inventories
9 Months Ended
Sep. 30, 2022
Real Estate Inventories [Abstract]  
Real Estate Inventories Real Estate Inventories
Real estate inventories are summarized as follows:
September 30, 2022 December 31, 2021
(dollars in thousands)
Deposits and pre-acquisition costs $ 98,764  $ 65,724 
Land held and land under development 216,945  243,310 
Homes completed or under construction 846,291  526,950 
Model homes 17,418  8,808 
Total real estate inventories $ 1,179,418  $ 844,792 
Deposits and pre-acquisition costs include land deposits and other due diligence costs related to potential land acquisitions. Land held and land under development includes costs incurred during site development such as development, indirect costs, and permits. Homes completed or under construction and model homes include all costs associated with home construction, including land, development, indirect costs, permits, materials, and labor.
In accordance with ASC 360, Property, Plant, and Equipment, real estate inventories are stated at cost, unless the carrying amount is determined not to be recoverable, in which case inventory is written down to its fair value. The Company reviews each real estate asset at the community-level, on a quarterly basis, or whenever indicators of impairment exist. We generally determine the estimated fair value of each community by using a discounted cash flow approach based on the estimated future cash flows at discount rates that reflect the risk of the community being evaluated. The discounted cash flow approach can be impacted significantly by the Company’s estimates of future home sales revenue, home construction costs, pace of homes sales, and the applicable discount rate, all of which are Level 3 inputs.
For each of the three and nine months ended September 30, 2022 and 2021 the Company did not recognize any impairments on real estate inventories.