Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of David Bragg - Merrill Lynch.
David Bragg
Yes good morning. Just wanted to focus on the decision that you’ve made on the home sales business, and as you look at that, clearly the benefit [break in audio] forward for 2009, what are the risks and the costs that you could see going out over the next three to five years [break in audio] cut back this business now, and in terms of community quality or higher operating expenses?
Unidentified Corporate Participant
I would say that we're making the decision in light of the short-term economic environment and not a long-term change in our strategic view of how we want to run our properties. We're sitting with an inventory of approximately 250 homes. If you look at the cost of carrying that inventory non cash flow generating, and the sales of the cost and marketing operation around that, that was a pretty significant drag.
We did not see the home sale environment improving in 2009. Everybody knows what's going on with single-family housing environment right now. There's significant liquidation of foreclosures that are occurring. There's difficulty accessing the credit markets for home buyers, and out customers at the margin, even if they could buy, are opting to rent in the current economic environment, so I would say the decision was made with the light of today's uncertainty.
I think you will see us reinitiate a home sale program in the future, and if you recall, the home sale program used to be a net positive to our results, not the $3 million plus negative that is occurring right now, and we don't think it's going to meaningfully change our strategic initiatives. That was just a customer quality, or the quality of the lifestyle or our amenity package.
David Bragg
Could we just review those numbers real quick? How many homes are currently in the rental pool?
Unidentified Corporate Participant
New homes, I think, is somewhere around 300; 100 that we've already rented that were in our new home inventory. We have about 250 for sale homes in inventory that have been held back selling program. As a result of this decision those 250 homes will be now available for rental.
We've also made the decision that we will stop buying inventory at least until the January 2009 period where we can reassess the environment. So eventually what we're going to be working with over the next few months – maybe half a year – is going to be the existing sale inventory that has been converted to rental. And we've been renting that new home inventory up at anywhere from – call it 50 to 70 – a quarter.
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