Question-and-Answer Session
Operator
(Operator Instructions). First up from Citigroup this is Stephen Kim.
Dom Cecere
Hi Steve. We lost him.
Operator
Mr. Kim you may be muted, we can't hear you right now.
Stephen Kim - Citigroup
Hi guys. Can you hear me, okay?
Jeffrey Mezger
Yes, good morning Steve.
Stephen Kim - Citigroup
Okay. Good morning. I guess my first question is related to the specific number of options that you may have abandoned in the quarter. Could you give us an update on that?
Dom Cecere
There were no options abandoned in the quarter, this was all mostly impairments, joint venture and inventory owned.
Stephen Kim - Citigroup
Okay. And so can you remind us how much, over the last let's say 12 months that you have abandoned in terms of lot option?
Dom Cecere
I think the dollar amount is about $100 million worth, and it's somewhere between 45,000 and 50,000 lots.
Stephen Kim - Citigroup
And would you say at this point that...
Dom Cecere
About 3 grand a lot, under 3 grand a lot I believe.
Stephen Kim - Citigroup
Okay. And do you think at this point may be pretty much through the option abandonment? I mean at this point you are also not signing a whole lot of new ones except for unusual circumstances like what you laid out. But would you say at this point that pretty much what you've got, and most likely you probably going to follow-up through given the valuation on those options?
Dom Cecere
Yes. I think that's correct Steve, because with the option cost now down just somewhere around 30,000, 40,000 lots so.
Stephen Kim - Citigroup
Right, exactly. Okay.
Dom Cecere
There wouldn't be much impairments left.
Stephen Kim - Citigroup
Okay.
Dom Cecere
Abandonment cost or options anyways.
Stephen Kim - Citigroup
Okay. Great. Thanks very much.
Dom Cecere
You're welcome.
Operator
Moving on now to Greg Gieber at A.G. Edwards.
Greg Gieber - A.G. Edwards
Morning guys.
Dom Cecere
Good morning, Greg.
Greg Gieber - A.G. Edwards
Jeff, I wonder if you could go into more detail on the comment you made that by the end of the year, 75% of your products have been replaced with new lower priced products. Just roughly what kind of price reductions are you putting in place? How much of these are physically smaller or less specified? And as you move to these smaller or lower priced houses what is the implication for your gross margins?
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