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 June 30, 2002 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 July 9, 2002:

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

Common Stock, no par value                                         10,254,005
<PAGE>

                               CALPROP CORPORATION

                                     Part I

                         Item I - Financial Information

      Set forth is the unaudited quarterly report for the quarters ended June
30, 2002 and 2001, for Calprop Corporation. The information set forth reflects
all adjustments which were, in the opinion of management, necessary for a fair
presentation.
<PAGE>

                               CALPROP CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                     ASSETS

                                                      June 30,      December 31,
                                                          2002              2001
                                                   -----------      ------------

Real estate under development (Note 5)             $51,883,653       $88,789,252

Other assets:
  Cash and cash equivalents                          3,563,968         2,079,471
  Deferred tax assets (Note 2)                       4,327,262         6,535,343
  Other assets                                         842,048           774,882
  Receivable from affiliates                           167,274           788,752
                                                   -----------       -----------
     Total other assets                              8,900,552        10,178,448
                                                   -----------       -----------

     Total assets                                  $60,784,205       $98,967,700
                                                   ===========       ===========

                                   (Continued)

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


                                       3
<PAGE>

                              CALPROP CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                             June 30,   December 31,
                                                                 2002           2001
                                                          -----------   ------------
<S>                                                       <C>            <C>
Trust deeds and notes payable                             $26,917,552    $51,990,779
Related-party notes                                        18,107,043     26,219,560
                                                          -----------    -----------
     Total trust deeds, notes payable and related-party
       notes                                               45,024,595     78,210,339
Accounts payable and accrued liabilities                    1,723,131      5,334,450
Warranty reserves                                             760,268        670,115
                                                          -----------    -----------
     Total liabilities                                     47,507,994     84,214,904

Stockholders' equity:
  Common stock, no par value
    Authorized - 20,000,000 shares
    Issued and outstanding - 10,254,005 shares at
    June 30, 2002 and December 31, 2001                    10,254,005     10,254,005
  Additional paid-in capital                               25,845,986     25,845,986
  Deferred compensation                                       (51,000)       (51,000)
  Stock purchase loans                                       (521,367)      (537,179)
  Accumulated deficit                                     (22,251,413)   (20,759,016)
                                                          -----------    -----------
     Total stockholders' equity                            13,276,211     14,752,796
                                                          -----------    -----------

                                                          $60,784,205    $98,967,700
                                                          ===========    ===========
</TABLE>

                                   (Concluded)

                     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             Six Months Ended
                                                                  June 30,                      June 30,
                                                         --------------------------    --------------------------
                                                             2002           2001           2002           2001
                                                         -----------    -----------    -----------    -----------
<S>                                                      <C>            <C>            <C>            <C>
Development operations:
  Real estate sales                                      $43,058,399    $26,757,550    $64,350,669    $50,429,686
  Cost of real estate sales                               42,305,392     24,377,392     63,502,888     46,003,691
                                                         -----------    -----------    -----------    -----------
Income from development operations before
  recognition of impairment of real estate                   753,007      2,380,158        847,781      4,425,995

Recognition of impairment of real estate
  development (Note 5)                                    (1,832,225)                   (1,832,225)
                                                         -----------    -----------    -----------    -----------
(Loss) income from development operations                 (1,079,218)     2,380,158       (984,444)     4,425,995

Income from investment in real estate venture (Note 5)       185,022                       109,253

Other income:
  Interest and miscellaneous                                 190,251         37,436        252,299         70,619
  Management fee                                                                           207,182
                                                         -----------    -----------    -----------    -----------
Total other income                                           190,251         37,436        459,481         70,619

Other expenses-
  General and administrative                                 521,006        695,344      1,076,452      1,430,187

Minority interests (Note 4)                                                  (1,825)           235         (1,825)
                                                         -----------    -----------    -----------    -----------

(Loss) income before provision for income taxes           (1,224,951)     1,724,075     (1,492,397)     3,068,252
Provision for income taxes (Note 2)
                                                         -----------    -----------    -----------    -----------
Net (loss) income                                        ($1,224,951)    $1,724,075    ($1,492,397)    $3,068,252
                                                         ===========    ===========    ===========    ===========

Basic net (loss) income per share (Note 3)                    ($0.12)         $0.17         ($0.15)         $0.30
                                                              ======          =====         ======          =====

Diluted net (loss) income per share (Note 3)                  ($0.12)         $0.17         ($0.15)         $0.29
                                                              ======          =====         ======          =====
</TABLE>

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


                                       5
<PAGE>

                               CALPROP CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                                June 30,
                                                                       --------------------------
                                                                            2002          2001
                                                                       --------------------------
<S>                                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net (loss) income                                                 ($1,492,397)    $3,068,252
     Adjustments to reconcile net (loss) income to net cash provided
       by operating activities:
         Minority interests                                                    235         (1,825)
         Recognition of impairment of real estate development            1,832,225
         Income from investment in real estate venture                    (109,253)
         Depreciation and amortization                                      21,315         24,513
         Provision for  warrantly reserves                                 175,105        162,171
         Deferred income taxes                                           2,208,081
     Change in assets and liabilities:
         Other assets                                                      (82,999)       (12,008)
         Receivable from affiliates                                        621,478
         Accounts payable and accrued liabilities                       (3,611,319)    (2,305,122)
         Warranty reserves                                                 (84,952)      (129,227)
         Additions to real estate under development                    (28,320,496)   (36,321,767)
         Cost of real estate sales                                      63.502,888     46,003,691
         Accrued interest for executive stock purchase loans               (10,723)       (11,276)
                                                                       --------------------------
               Net cash provided by operating activities                34,649,188     10,477,402

CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                                   (5,482)        (1,788)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Borrowings under related-party notes                                1,663,977      2,200,000
     Payments under related-party notes                                 (9,776,494)    (2,955,675)
     Borrowings under trust deeds and notes payable                     24,992,491     36,597,927
     Payments under trust deeds and notes payable                      (50,065,718)   (44,892,838)
     Repayment of stock purchase loans                                      26,535
                                                                       --------------------------
               Net cash used in financing activities                   (33,159,209)    (9,050,586)
                                                                       --------------------------
     Net increase in cash and cash equivalents                           1,484,497      1,425,028
     Cash and cash equivalents at beginning of period                    2,079,471      2,394,310
                                                                       --------------------------
     Cash and cash equivalents at end of period                         $3,563,968     $3,819,338
                                                                       ==========================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the period for income taxes                          $47,351        $95,345
                                                                       ==========================
</TABLE>

                     The accompanying notes are an integral
                       part of these financial statements


                                       6
<PAGE>

                               CALPROP CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      PERIODS ENDED JUNE 30, 2002 AND 2001
                                   (Unaudited)

Note 1: Basis of presentation and significant accounting policies

        The unaudited, condensed, consolidated 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 accounting principles generally
        accepted in the United States of America for complete financial
        statements. The accompanying financial statements have not been audited
        by independent auditors in accordance with auditing standards generally
        accepted in the United States of America, but in the opinion of
        management, such financial statements include all adjustments,
        consisting only of normal recurring adjustments necessary to present
        fairly the financial position of Calprop Corporation ("the Company") and
        its 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 results of operations for the three and six months ended June 30,
        2002 may not be indicative of the operating results for the year ending
        December 31, 2002.

Note 2: Income taxes

        As of June 30, 2002, the Company had gross deferred tax assets of
        $6,325,570 offset by a deferred tax asset valuation allowance of
        $1,998,308. During the six months ended June 30, 2002, the Company
        increased the deferred tax asset allowance by $593,485 which offset the
        net current benefit for the period. The Company has assessed its past
        earnings history and trends, sales backlog, budgeted sales, and
        expiration dates of net operating loss carryforwards and has determined
        that it is more likely than not that the $4,327,262 of deferred tax
        assets will be realized.

        As of June 30, 2002, the Company had net operating loss carryforwards
        for federal income tax purposes of approximately $16,255,700. For
        federal tax purposes the net operating loss carryforwards expire from
        2007 through 2013.


                                       7
<PAGE>

Note 3: Earnings per share

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

<TABLE>
<CAPTION>
                                                                 Three Months Ended          Six Months Ended
                                                                      June 30,                   June 30,
                                                              ---------------------------------------------------
                                                                 2002          2001         2002          2001
                                                              ---------------------------------------------------
<S>                                                           <C>           <C>          <C>           <C>
Net (loss) income                                            ($1,224,951)   $1,724,075  ($1,492,397)   $3,068,252
                                                             ----------------------------------------------------

Numberator for basic and diluted net (loss) income per
  share                                                      ($1,224,951)   $1,724,075  ($1,492,397)   $3,068,252
                                                             ====================================================
Denominator for basic net (loss) income per share (weighted   10,254,005    10,290,535   10,254,005    10,290,535
  average outstanding shares)
Effect of dilutive stock options                                               157,141                    141,948
                                                             ----------------------------------------------------
Weighted average shares for dilutive net income per share     10,254,005    10,447,676   10,254,005    10,432,483
                                                             ====================================================
Basic net (loss) income per share                                 ($0.12)        $0.17       ($0.15)        $0.30
                                                             ====================================================
Diluted net (loss) income per share                               ($0.12)        $0.17       ($0.15)        $0.29
                                                             ====================================================
</TABLE>

Note 4: Consolidation

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

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
                                                   Ownership interest at
                   Entity                             March 31, 2002                           Development
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                 <C>
Colorado Pacific Homes, Inc. ("CPH")                       100%                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")                                100%                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 99% to the
        Company, and the other member, an officer of the Company, is entitled to
        receive the remaining one percent of the profits.

        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.


                                       8
<PAGE>

        During the six months ended June 30, 2002, $1,730 of the total loss of
        $1,965 incurred by the entities related to the minority interest was not
        allocated to the minority interest because the minority interest had a
        deficit interest in those entities. The Company does not reflect the
        deficit for the minority interest because the minority owners are not
        responsible for losses incurred beyond their equity. The unrecognized
        minority interest in deficit of the Company as of June 30, 2002 and
        December 31, 2001 was $67,595 and $65,865, respectively. As a result,
        the Company has recorded minority interest of $0 as of June 30, 2002 and
        December 31, 2001.

Note 5: Real estate under development

        Impairment of real estate under development-During the second quarter,
        the Company recorded an impairment loss on real estate under development
        of $271,844 in the Saddlerock project. The project consisted of 94 homes
        with five product lines in Aurora, Colorado. The lack of demand of the
        product lines resulted in a slower absortion rate. The Company
        introduced three new product lines and converted certain upgrades as
        standards during the second quarter of 2002 to increase the absorption
        rate. The introduction of the new product lines increased direct
        construction cost, marketing, production overhead and interest costs and
        as a result the Company recorded an impairment loss on real estate under
        development.

        Additionally, during the second quarter, the Company recorded an
        impairment loss on real estate under development of $1,560,381 in the
        Parc Metropolitan project as actual sales prices for certain units were
        lower than anticipated. The lack of demand for upgrades and options in
        the project also impacted the sales revenue for the project.

        Investment of real estate venture-The Company has a 25 percent interest
        in RGC Carmel Country, LLC, the "Joint Venture". The Joint Venture
        consists of 182 townhomes available for lease in San Diego. The
        Company's allocable share of losses, if any, from investments in real
        estate ventures are recognized in the financial statements until the
        related investment account is reduced to a zero balance. Losses incurred
        after the investment account is reduced to zero are not recongized. The
        cumulative amount of unrecognized equity in losses of unconsolidated
        real estate ventures was $481,507 and $0 as of June 30, 2002 and
        December 31, 2001, respectively.

        Distributions received by the Company from the real estate ventures are
        accounted for as a return of capital until the investment balance is
        reduced to zero. Subsequent distributuions received are recognized as
        income.


                                       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 June 30, 2002, the Company had remaining loan commitments from
financial institutions of approximately $13,480,000, 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 June 30, 2002, the Company had four residential housing projects in
various stages of development, with four producing revenues from completed homes
and townhomes: Parc Metropolitan, High Ridge Court, Saddlerock, and Montserrat
Classics. As of June 30, 2002, the Company has 94 homes under construction, of
which 56 are in escrow to be sold, and 17 model units. Additionally, the Company
has an inventory of 121 lots under development. In addition to the construction
and sale of single-family and multifamily housing, the Company is engaged in the
development of apartments and townhomes available for lease. As of June 30,
2002, the Company had two projects under development (one project consists of a
25% equity interest in a real estate venture), the total projects consist of 182
units available for lease and 68 units under construction.

      As of June 30, 2002, the Company had 56 units in escrow ("backlog")
compared with a backlog of 87 units as of June 30, 2001. The gross revenues of
such backlog was $19,517,378 and $31,920,000 as of June 30, 2002 and 2001,
respectively.

      Based on its agreements with its lenders, the Company believes that it
will have sufficient liquidity to finance its construction projects in 2002
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 2002, minimize
operating expenses, and maintain control over costs. With regard to the debt
coming due in 2002, 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 2002.

Results of operations

      Real estate sales for the three months ended June 30, 2002 increased 60.9%
to $43,058,399 from $26,757,550 for the three months ended June 30, 2001. For
the six months ended June 30, 2002, real estate sales increased 27.6% to
$64,350,669 from $50,429,686 in the year-earlier period. The increase in real
estate sales for the three and six month periods of 2002 was primarily due to
the high volume of inventory of completed homes available for sale in 2002
compared to completed homes available for sale in 2001. In the second quarter of
2002, the Company sold 113 homes with an average sales price of $381,050, a
48.7% increase in the volume of home sales compared to 76 homes with an average
sales price of $352,200 for the second quarter of 2001. During the first six
months of 2002, the Company sold 171 homes with an average sales price of
$376,300, a 18.8% increase in the volume of home sales compared to 144 homes
with an average sales price of $350,200 for the six months of 2001.

      Income from development operations before recognition of impairment of
real estate decreased to $753,007 in the second quarter of 2002 from $2,380,158
in the second quarter of 2001. For the six months ended


                                       10
<PAGE>

June 30, 2002, income from development operations before recognition of
impairment of real estate decreased to $847,781 from $4,425,995. The significant
decrease of income from development operations during the second quarter of 2002
and six months ended June 30, 2002 resulted from a slower absorption rate, and
increased production overhead costs. The increased sales price was not
sufficient to offset the increased direct construction cost, marketing and sales
incentives, production overhead and interest costs.

      During the second quarter of 2002, the Company recorded an impairment loss
on real estate under development of $271,844 in the Saddlerock project. The
project consisted of 94 homes with five product lines in Aurora, Colorado. The
lack of demand of the product lines resulted in a slower absortion rate. The
Company introduced three new product lines and converted certain upgrades as
standards during the second quarter of 2002 to increase the absorption rate. The
introduction of the new product lines increased direct construction cost,
marketing, production overhead and interest costs and as a result the Company
recorded an impairment loss on real estate under development.

      Additionally, during the second quarter of 2002, the Company recorded an
impairment loss on real estate under development of $1,560,381 in the Parc
Metropolitan project as actual sales prices for certain units were lower than
anticipated. The lack of demand for upgrades and options in the project also
impacted the sales revenue for the project.

      General and administrative expenses decreased to $521,006 in the three
months ended June 30, 2002 from $695,344 in the corresponding period. For the
six months ended June 30, 2002, general and administrative expenses decreased to
$1,076,452 from $1,430,187 in the corresponding 2001 period. The decrease is due
to the focus efforts to decrease corporate overhead costs.

Item 3 Quantitative and Qualitative Disclosure about Market Risk

      The Company's exposure to market risk has not materially changed from what
was reported on the Company's Form 10-K for the year ended December 31, 2001.


                                       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 1, 2002 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, 2001 and unaudited consolidated financial statements for the quarter ended
December 31, 2001, and under item 7(c) a press release announcing Calprop
Corporations' 2001 annual and fourth quarter results.

            A Current Report on Form 8-K dated May 15, 2002 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, 2002, and under item 7(c) a press release announcing Calprop Corporations'
first 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)
                        August 9, 2002


                                       12
<PAGE>

                                  CERTIFICATION

            Each of the undersigned hereby certifies in his capacity as an
officer of Calprop Corporation (the "Company") that the Quarterly Report of the
Company on Form 10-Q for the periods ended June 30, 2002 fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934 and that
the information contained in such report fairly presents, in all material
respects, the financial position of the Company at the end of such periods and
the results of operations of the Company for such periods.


                  /s/ Victor Zaccaglin
                  -------------------------------------------
                  Victor Zaccaglin
                  Chairman of the Board
                  Chief Executive Officer
                  August 9, 2002


                  /s/ Mark F. Spiro
                  -------------------------------------------
                  Mark F. Spiro
                  Vice President/Secretary/Treasurer
                  (Chief Financial and Accounting Officer)
                  August 9, 2002


                                       13