Landsea Homes Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Real Estate Inventories

Real Estate Inventories

3 Months Ended

Mar. 31, 2023

Real estate inventories are summarized as follows:


	March 31, 2023		December 31, 2022
	(dollars in thousands)
Deposits and pre-acquisition costs	$	99,458	$	101,395
Land held and land under development	185,049		191,047
Homes completed or under construction	769,798		779,352
Model homes	26,572		21,575
Total real estate inventories	$	1,080,877	$	1,093,369

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. The Company generally determines 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 months ended March 31, 2023 and 2022 the Company did not recognize any impairments on real estate inventories.