SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

                Quarterly Report Under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

(Mark One)

|X|   Quarterly report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934

      For the quarterly period ended September 30, 2000 or

|_|   Transition report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934

      For the transition period from _______________ to __________________

Commission File Number 1-6844

                               CALPROP CORPORATION
             (Exact name of registrant as specified in its charter)

            California                              95-4044835
-----------------------------------------       -------------------
   (State or other jurisdiction of               (I.R.S. Employer
   incorporation or organization)               Identification No.)

    13160 Mindanao Way, Suite 180, Marina Del Rey, California        90292
-------------------------------------------------------------   -------------
    (Address of principal executive offices)                      (Zip Code)

(Registrant's telephone number, including area code) (310) 306-4314

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report.)

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES |X| NO |_|

Number of shares outstanding of each of Registrant's classes of common stock, as
of October 26, 2000:

                                                    Number of Shares
Title of Each Class                                 Outstanding
-------------------------                           ----------------

Common Stock, no par value                                10,290,535
<PAGE>

                               CALPROP CORPORATION

                                     Part I

                         Item I - Financial Information

      Set forth is the unaudited quarterly report for the quarters ended
September 30, 2000 and 1999, for Calprop Corporation. The information set forth
reflects all adjustments which were, in the opinion of management, necessary for
a fair presentation.


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<PAGE>

                               CALPROP CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                September 30,       December 31,
                                                         2000              1999
                                                  (Unaudited)
                                                 ------------       ------------

Real estate under development                    $104,798,403       $ 79,070,791

Other assets:
  Cash and cash equivalents                         2,040,252          1,405,663
  Prepaid expenses                                     90,231             84,219
  Deferred tax asset (note 2)                       6,233,074          6,500,000
  Other assets                                        802,480            756,970
                                                 ------------       ------------
     Total other assets                             9,166,037          8,746,852
                                                 ------------       ------------

                                                 $113,964,440       $ 87,817,643
                                                 ============       ============

                     The accompanying notes are an integral
                       part of these financial statements.


                                       3
<PAGE>

                               CALPROP CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                September 30,     December 31,
                                                                         2000             1999
                                                                 (Unaudited)
                                                                -------------    -------------
<S>                                                             <C>              <C>
Trust deeds and notes payable                                   $  73,982,281    $  48,216,139
Related party notes                                                22,694,288       24,860,032
                                                                -------------    -------------
     Total trust deeds, notes payable and related party notes      96,676,569       73,076,171
Accounts payable and accrued liabilities                            8,548,829        6,391,621
Warranty reserves                                                     473,526          358,287
                                                                -------------    -------------
     Total liabilities                                            105,698,924       79,826,079

Minority interests (note 4)                                                            228,191

Stockholders' equity:
  Common stock, no par value
    Authorized - 20,000,000 shares
    Issued and outstanding - 10,290,535 and
      10,293,735 shares at September 30, 2000 and
      December 31, 1999, respectively                              10,290,535       10,293,735
  Additional paid-in capital                                       25,849,961       25,849,961
  Deferred compensation                                              (167,127)        (170,327)
  Stock purchase loans                                               (514,002)        (496,934)
  Accumulated deficit                                             (27,193,851)     (27,713,062)
                                                                -------------    -------------
     Total stockholders' equity                                     8,265,516        7,763,373
                                                                -------------    -------------

                                                                $ 113,964,440    $  87,817,643
                                                                =============    =============
</TABLE>

                     The accompanying notes are an integral
                       part of these financial statements.


                                       4
<PAGE>

                               CALPROP CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   Three Months Ended               Nine Months Ended
                                                                       September 30,                  September 30,
                                                               ------------------------------------------------------------
                                                                   2000            1999            2000            1999
                                                               ------------    ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>             <C>
Development operations:
  Real estate sales                                            $ 16,525,836    $ 15,730,888    $ 34,323,298    $ 41,895,447
  Cost of real estate sales                                      14,765,814      15,100,809      32,072,973      40,017,706
                                                               ------------    ------------    ------------    ------------
Income from development operations                                1,760,022         630,079       2,250,325       1,877,741

Recognition of impairment of real estate
 Development (note 1)                                                    --      (2,519,521)             --      (2,519,521)
                                                               ------------    ------------    ------------    ------------
Income (loss) from development operations                         1,760,022      (1,889,442)      2,250,325        (641,780)

Other income                                                        112,339          24,424         187,212          80,163

Other expenses:
  General and administrative                                        718,548         572,261       1,973,097       1,566,614
  Interest                                                          (40,008)          8,742          13,518          57,524
                                                               ------------    ------------    ------------    ------------
Total other expenses                                                678,540         581,003       1,986,615       1,624,138

Minority interests (note 4)                                          10,000          26,973        (216,393)       (115,788)

Income (loss) before income taxes (benefit for income taxes)      1,183,821      (2,472,994)        667,315      (2,069,967)
Income taxes (benefit for income taxes) (note 2)                    286,181      (3,400,000)        148,104      (3,400,000)
                                                               ------------    ------------    ------------    ------------
Net income                                                     $    897,640    $    927,006    $    519,211    $  1,330,033
                                                               ============    ============    ============    ============

Basic and diluted net income per share (note 3)                       $0.09           $0.09           $0.05           $0.13
                                                                      =====           =====           =====           =====
</TABLE>

                     The accompanying notes are an integral
                       part of these financial statements.


                                        5
<PAGE>

                               CALPROP CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                            Three Months Ended              Nine Months Ended
                                                                               September 30,                  September 30,
                                                                       ------------------------------------------------------------
                                                                           2000            1999            2000            1999
                                                                       ------------    ------------    ------------    ------------
<S>                                                                    <C>             <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                        $    897,640    $    927,006    $    519,211    $  1,330,033
     Adjustments to reconcile net income to net cash
     used in operating activities:
         Minority interests                                                  10,000          26,973        (216,393)       (115,788)
         Depreciation and amortization                                       15,454          15,447          47,074          43,534
         Recognition of impairment of real estate under                          --       2,519,521              --       2,519,521
           development
         Provision for warranty reserves                                   (240,759)         30,001         134,771         125,231
     Change in assets and liabilities:
         Decrease (increase) in other assets                                209,327      (1,326,977)        (64,608)     (1,332,961)
         Decrease (increase) in deferred tax assets                         266,926      (3,400,000)        266,926      (3,400,000)
         Decrease in prepaid expenses                                       (35,542)        (36,994)         (6,012)        (10,199)
         Increase (decrease) in accounts payable and accrued                975,444        (221,368)      2,157,208         352,245
            liabilities
         Increase (decrease) in warranty reserves                           205,304              --         (19,532)             --
        Additions to real estate under development                      (23,691,039)    (11,429,559)    (57,800,585)    (39,431,634)
        Cost of real estate sales                                        14,765,814      12,698,425      32,072,973      37,498,185
        Accrued interest for executive stock purchase loans                  (5,730)         (5,731)        (17,068)        (17,069)
                                                                       ------------    ------------    ------------    ------------
               Net cash used in operating activities                     (6,627,161)       (203,256)    (22,926,035)     (2,438,902)

CASH FLOWS FROM INVESTING ACTIVITIES -
     Capital expenditures                                                   (10,183)        (25,520)        (27,976)        (63,142)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Borrowings under related party notes                                 1,800,000         928,791       5,650,000       2,870,840
     Payments under related party notes                                  (1,461,404)     (1,052,905)     (7,815,744)     (3,813,206)
     Borrowings under trust deeds and notes payable                      24,495,323      16,541,311      64,207,545      40,722,506
     Payments under trust deeds and notes payable                       (17,112,934)    (17,908,460)    (38,441,403)    (37,528,897)
     Proceeds from issuance of common stock                                      --              --              --           4,688
     Distributions to joint venture partner                                 (10,000)        (92,637)        (11,798)        (92,637)
                                                                       ------------    ------------    ------------    ------------
               Net cash provided by (used in) financing activities        7,710,985      (1,583,900)     23,588,600       2,163,294
                                                                       ------------    ------------    ------------    ------------
     Net increase (decrease) in cash and cash equivalents                 1,073,641      (1,812,676)        634,589        (338,750)
     Cash and cash equivalents at beginning of periods                      966,611       3,064,329       1,405,663       1,590,403
                                                                       ------------    ------------    ------------    ------------
     Cash and cash equivalents at end of periods                       $  2,040,252    $  1,251,653    $  2,040,252    $  1,251,653
                                                                       ============    ============    ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the periods for -
         Interest (net of amount capitalized)                              $(40,008)         $8,742         $13,518         $57,524

         Income taxes                                                      (122,217)         21,727        (118,822)         21,727
</TABLE>

                     The accompanying notes are an integral
                       part of these financial statements


                                        6
<PAGE>

                               CALPROP CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

                    PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (Unaudited)

Note 1: Basis of presentation and significant accounting policies

      The unaudited, condensed, financial statements included herein have been
      prepared by the registrant pursuant to the instructions to Quarterly
      Report on Form 10-Q required to be filed with the Securities and Exchange
      Commission and do not include all information and footnote disclosure
      required by generally accepted accounting principles. The accompanying
      financial statements have not been examined by independent accountants in
      accordance with generally accepted auditing standards, but in the opinion
      of management, such financial statements include all adjustments,
      consisting only of normal recurring adjustments necessary to summarize
      fairly the financial position of Calprop Corporation ("the Company") and
      results of operations. The condensed financial statements should be read
      in conjunction with the financial statements and the notes thereto
      included in the registrant's latest Annual Report on Form 10-K,
      particularly with regard to disclosures relating to major accounting
      policies.

      The Company regularly reviews the carrying value of its real estate
      developments for impairment whenever events or changes in circumstances
      indicate that the carrying amount of the asset may not be recoverable. If
      the sum of the expected future cash flows is less than the carrying amount
      of the asset, the Company recognizes an impairment loss. The Company
      introduced two new product lines at the Summertree Park, Elk Grove project
      during the second quarter of 1999 to increase the absorption rate and
      these were primarily sold during the third quarter. The increase in sales
      price was not sufficient to offset the increased direct construction cost,
      marketing and sales incentives, production overhead and interest costs and
      as a result the Company recorded an impairment loss on real estate under
      development of $2,519,521 during the third quarter of 1999.

      The results of operations for the nine months ended September 30, 2000 may
      not be indicative of the operating results for the year ending December
      31, 2000.

Note 2: Income taxes

      As of September 30, 2000, the Company had net operating loss carryforwards
      for federal and state income tax purposes of approximately $24,000,000 and
      $6,400,000, respectively. For federal and state tax purposes the net
      operating loss carryforwards expire from 2007 through 2013, and from 2000
      through 2003, respectively.

      Income taxes in 2000 includes the net refund resulting from a claim filed
      for the carryback of losses related to certain qualifying expenses
      incurred in 1994 of $141,488.


                                       7
<PAGE>

Note 3: Earnings per share

The following table sets forth the computation of basic and diluted net income
per share:

<TABLE>
<CAPTION>
                                                                Three Months Ended          Nine Months Ended
                                                                   September 30,               September 30,
                                                            -----------------------------------------------------
                                                                2000          1999         2000          1999
                                                            -----------------------------------------------------
<S>                                                         <C>           <C>           <C>           <C>
Net income                                                  $   897,640   $   927,006   $   519,211   $ 1,330,033
                                                            =====================================================

Weighted average shares for basic net income per share       10,291,673    10,279,657    10,291,673    10,280,516

   Effect of dilutive stock options                             186,299       437,215       183,716       356,559
                                                            -----------------------------------------------------
Weighted average shares for dilutive net income per share    10,477,972    10,716,872    10,475,389    10,637,075
                                                            =====================================================

Basic net income per share                                        $0.09         $0.09         $0.05         $0.13
                                                            =====================================================
Diluted net income per share                                      $0.09         $0.09         $0.05         $0.13
                                                            =====================================================
</TABLE>

Options to purchase 1,091,200 and 874,250 shares of common stock were
outstanding as of September 30, 2000 and 1999, respectively. For the three and
six months ended September 30, 2000, 587,200 options were not included in the
computation of diluted net income because their exercise prices were higher than
the average market price per share of common stock.

Note 4: Minority interest

The Company has consolidated the financial statements of the following entities:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                     Ownership interest at                      Development
                Entity                                September 30, 2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                <C>
Colorado Pacific Homes, Inc. ("CPH")                          80%                Real estate in the state of Colorado

DMM Development, LLC ("DMM")                                  67%                Cierra del Lago and Antares projects, California

Montserrat II, LLC ("Mont II")                                99%                Montserrat Estate project, California

Parkland Farms Development Co., LLC ("Parkland")              99%                115 lots in Healdsburg, California

RGCCLPO Development Co., LLC ("RGCCLPO")                     100%                382 lots in Milpitas, California

PWA Associates, LLC ("PWA")                                   50%                68 unit apartment in Milpitas, California
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

DMM: The Company is entitled to receive two-thirds of the profits of DMM, and
the other owner, RGC Courthomes, Inc. ("RGC"), is entitled to receive the
remaining one-third of the profits.

Mont II: Pursuant to the operating agreement of Mont II, income was allocated
first to PICal Housing Associates, L.P. ("PICaL") to obtain the
return of its capital. Subsequent income is allocated 100% to the Company.


                                       8
<PAGE>

Parkland: Pursuant to the operating agreement of Parkland, the Company is
entitled to receive ninety-nine percent of the profits of Parkland, and the
other member, an officer of the Company, is entitled to receive the remaining
one percent of the profits.

RGCCLPO: Pursuant to the operating agreement of RGCCLPO, the Company was
entitled to receive fifty percent of the profits of RGCCLPO, and the other
member, RGC, was entitled to receive the remaining fifty percent of the profits.
During December 1999, the Company purchased all of RGC's ownership
interest in RGCCLPO.

As a result of the consolidation, the Company has recorded minority interest of
$0 and $228,191 as of September 30, 2000 and December 31, 1999, respectively.


                                       9
<PAGE>

Item 2 Management's Discussion and Analysis of Financial Condition and Results
       of Operations

      The following discussion relates to the consolidated financial statements
of the Company and should be read in conjunction with the financial statements
and notes thereto appearing elsewhere in this report. Statements contained in
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations" that are not historical facts may be forward-looking statements.
Such statements are subject to certain risks and uncertainties, which could
cause actual results to differ materially from those projected. You are
cautioned not to place undue reliance on these forward-looking statements.

Liquidity and capital resources

      As of September 30, 2000, the Company had remaining loan commitments from
financial institutions of approximately $55,200,000, which may be drawn down by
the Company upon the satisfaction of certain conditions. The Company continues
to seek joint venture partners and additional financing to fund its operations.

      As of September 30, 2000, the Company had eight residential housing
projects in various stages of development, with four producing revenues from
completed homes: Parkland Farms, Parc Metropolitan, High Ridge Court and
Creekside Estates. The remaining four projects, Montserrat Classics, Parcwest
Apartments, Saddlerock, and McGuire Luxury Apartments are in various stages of
development. As of September 30, 2000, the Company has 390 homes under
construction, of which 147 are sold, and 22 model units. Additionally, the
Company has an inventory of 578 lots under development.

      As of September 30, 2000, the Company had 147 units in escrow ("backlog")
compared with a backlog of 98 units as of September 30, 1999. The gross revenues
of such backlog was $50,720,000 and $23,330,000 as of September 30, 2000 and
1999, respectively.

      Based on its agreements with its lenders, the Company believes that it
will have sufficient liquidity to finance its construction projects in 2000
through funds generated from operations, funds available under its existing bank
commitments, funds generated from new lending institutions, and, if necessary,
funds that could be obtained by using its internally financed real estate
development in process as collateral for additional loans.

      Management's plan, with respect to managing cash flow includes the
following components: pay off debt that is coming due in 2000, minimize
operating expenses, and maintain control over costs. With regard to the debt
coming due in 2000, management expects to extend the maturity dates of various
loans and pay the remaining loans off through cashflow from operations, prior to
their maturity date. With regard to minimizing operating expenses, management
plans to achieve this by continuing to closely examine overhead items.
Management anticipates that the funds generated from operations, including
borrowings from existing loan commitments, will be adequate to allow the Company
to continue operations throughout 2000.

Results of operations

      Gross revenues for the three months ended September 30, 2000 increased
5.1% to $16,525,836 from $15,730,888 for the three months ended Sepember 30,
1999. For the nine months ended September 30, 2000, gross revenues decreased
18.1% to $34,323,298 from $41,895,447 in the year-earlier period. The decrease
in gross revenues for the nine month period of 2000 was primarily due to the low
volume of inventory of completed homes for sales compared to the significant
increase in volume of projects in the early stages of construction. During the
nine months of 2000, the Company sold 131 homes with an average sales price of
$262,000, a 27.2% decrease in the volume of home sales compared to 180 homes
with an average sales price of $232,750 for the nine months of 1999.

      Gross profit increased to $1,760,022 in the third quarter of 2000 from
$630,079 in the third quarter of 1999. As a percentage of gross revenues, gross
profit increased by 6.7 percentage points to 10.7% in the third quarter of 2000
compared to 4.0% in the third quarter of 1999. The significant increase of gross
profit as a percentage of gross revenues during the third quarter of 2000
results from the increase in the number of home sales in the higher profit
margin projects Parc Metropolitan, Parkland Farms, and High Ridge Court compared
to the lower profit margin projects Summertree Park and Antares primarily sold
during 1999. For the nine months


                                       10
<PAGE>

ended September 30, 2000, gross profit increased to 6.6% from 4.5% for the
corresponding period in 1999. The increase results from the homes sold in the
higher profit margin projects during the nine months ended September 30, 2000.
In addition, during the nine months of 1999, numerous sales offices were in the
process of opening, thus, marketing expenses associated with the development of
product awareness were incurred for the Parc Metropolitan, Parkland Farms, and
High Ridge Court projects, which entailed significant nonrecurring startup
marketing costs.

      The Company introduced two new product lines at the Summertree Park, Elk
Grove project during the second quarter of 1999 to increase the absorption rate
and these were primarily sold during the third quarter. The increase in sales
price was not sufficient to offset the increased direct construction cost,
marketing and sales incentives, production overhead and interest costs and as a
result the Company recorded an impairment loss on real estate under development
of $2,519,521 during the third quarter of 1999.

      General and administrative expenses increased to $718,548 in the three
months ended September 30, 2000 from $572,261 in the corresponding 1999 period.
For the nine months ended September 30, 2000, general and administrative
expenses increased to $1,973,097 from $1,566,614 in the corresponding 1999
period. The increase is due to the significant growth in the number of lots
under development.


                                       11
<PAGE>

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits -

      27    Financial data schedule

      (b) Reports on Form 8-K

            A Current Report on Form 8-K dated April 19, 2000 was filed with the
Securities and Exchange Commission (the "Commission") and included under item
7(a) its audited consolidated financial statements for the year ended December
31, 1999 and unaudited consolidated financial statements for the quarter ended
December 31, 1999, and under item 7(c) a press release announcing Calprop
Corporations' 1999 annual and fourth quarter results.

            A Current Report on Form 8-K dated May 17, 2000 was filed with the
Securities and Exchange Commission (the "Commission") and included under item
7(a) its unaudited consolidated financial statements for the quarter ended March
31, 2000, and under item 7(c) a press release announcing Calprop Corporations'
first quarter results

            A Current Report on Form 8-K dated August 15, 2000 was filed with
the Securities and Exchange Commission (the "Commission") and included under
item 7(a) its unaudited consolidated financial statements for the quarter ended
June 30, 2000, and under item 7(c) a press release announcing Calprop
Corporations' second quarter results.

                                   SIGNATURES

            Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                        CALPROP CORPORATION


                   By: /s/ Mark F. Spiro                       .
                       ----------------------------------------
                       Mark F. Spiro
                       Vice President/Secretary/Treasurer
                       (Chief Financial and Accounting Officer)
                       November 13, 2000


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