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, 2001 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 6, 2001:

                                                                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 June
30, 2001 and 2000, 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

                                     ASSETS

                                                     June 30,       December 31,
                                                         2001               2000
                                                 (Unaudited)
                                                 ------------       ------------

Real estate under development                    $ 88,864,348       $ 98,544,447

Other assets:
  Cash and cash equivalents                         3,819,338          2,394,310
  Deferred tax assets (note 2)                      6,535,343          6,535,343
  Other assets                                        852,695            863,412
                                                 ------------       ------------
     Total other assets                            11,207,376          9,793,065
                                                 ------------       ------------

                                                 $100,071,724       $108,337,512
                                                 ============       ============

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


                                       3
<PAGE>

                               CALPROP CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                      June 30,      December 31,
                                                          2001             2000
                                                  (Unaudited)
                                                 -------------    -------------

Trust deeds and notes payable                    $  58,046,577    $  66,341,488
Related-party notes                                 19,946,568       20,702,243
                                                 -------------    -------------
     Total trust deeds, notes payable and           77,993,145       87,043,731
       related-party notes
Accounts payable and accrued liabilities             7,011,559        9,316,681
Warranty reserves                                      579,928          546,984
                                                 -------------    -------------
     Total liabilities                              85,584,632       96,907,396

Stockholders' equity:
  Common stock, no par value
    Authorized - 20,000,000 shares
    Issued and outstanding - 10,290,535 shares
    at June 30, 2001 and December 31, 2000          10,290,535       10,290,535
  Additional paid-in capital                        25,849,961       25,849,961
  Deferred compensation                               (105,525)        (105,525)
  Stock purchase loans                                (531,009)        (519,733)
  Accumulated deficit                              (21,016,870)     (24,085,122)
                                                 -------------    -------------
     Total stockholders' equity                     14,487,092       11,430,116
                                                 -------------    -------------

                                                 $ 100,071,724    $ 108,337,512
                                                 =============    =============

                     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,
                                                         -----------------------------------------------------------
                                                             2001            2000          2001            2000
                                                         -------------   ------------  -------------   -------------
<S>                                                       <C>            <C>            <C>             <C>
Development operations:
  Real estate sales                                       $26,757,550    $10,214,099    $50,429,686     $17,797,462
  Cost of real estate sales                                24,377,392      9,400,957     46,003,691      17,307,159
                                                         ------------    ------------------------------------------
Income from development operations                          2,380,158        813,142      4,425,995         490,303
                                                         ------------    ------------------------------------------

Other income                                                   37,436         36,822         70,619          74,873
                                                         ------------    ------------------------------------------

Other expenses:
  General and administrative                                  695,344        618,544      1,430,187       1,254,549

  Interest                                                         --         36,764             --          53,526
                                                         ------------    ------------------------------------------
Total other expenses                                          695,344        655,308      1,430,187       1,308,075
                                                         ------------    ------------------------------------------

Minority interests (note 4)                                    (1,825)            --         (1,825)       (226,393)

Income (loss) before benefit for income taxes               1,724,075        194,656      3,068,252        (516,506)

Benefit for income taxes (note 2)                                  --             --             --         138,077
                                                         ------------    ------------  -------------   ------------
Net income (loss)                                        $  1,724,075    $   194,656   $  3,068,252       ($378,429)
                                                         ============    ============  =============   ============

Basic and diluted net income (loss) per share (note 3)          $0.17          $0.02          $0.30          ($0.04)
                                                                =====          ======         ======         ======

Basic and diluted net income (loss) per share (note 3)          $0.17          $0.02          $0.29          $(0.04)
                                                                =====          ======         ======         ======
</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,
                                                           -----------------------------
                                                               2001            2000
                                                           ------------    -------------
<S>                                                         <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                        $  3,068,252     $  (378,429)
  Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
     Minority interests                                          (1,825)       (226,393)
     Depreciation and amortization                               24,513          31,620
     Provision for warrantly reserves                           162,171         375,530
  Change in assets and liabilities:
     Other assets                                               (40,564)       (273,935)
     Prepaid expenses                                            28,556          29,530
     Accounts payable and accrued liabilities                (2,305,122)      1,181,764
     Warranty reserves                                         (129,227)       (224,836)
    Additions to real estate under development              (36,321,767)    (34,109,546)
    Cost of real estate sales                                46,003,691      17,307,159
    Accrued interest for executive stock purchase loans         (11,276)        (11,338)
                                                           -----------------------------
     Net cash provided by (used in) operating activities     10,477,402     (16,298,874)

CASH FLOWS FROM INVESTING ACTIVITIES -
  Capital expenditures                                           (1,788)        (17,793)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under related-party notes                        2,200,000       3,850,000
  Payments under related-party notes                         (2,955,675)     (6,354,340)
  Borrowings under trust deeds and notes payable             36,597,927      39,712,222
  Payments under trust deeds and notes payable              (44,892,838)    (21,328,469)
  Distributions to joint venture partner                             --          (1,798)
                                                           -----------------------------
     Net cash (used in) provided by financing activities     (9,050,586)     15,877,615
                                                           -----------------------------
  Net increase (decrease) in cash and cash equivalents        1,425,028        (439,052)
  Cash and cash equivalents at beginning of period            2,394,310       1,405,663
                                                           -----------------------------
  Cash and cash equivalents at end of period               $  3,819,338     $   966,611
                                                           =============================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the period for -
    Interest (net of amount capitalized)                                       $53,526
    Income taxes                                               $95,345          $3,395
</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, 2001 AND 2000
                                   (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 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.

            Recent accounting pronouncements - The Financial Accounting
            Standards Board issued Statement of Financial Accounting Standards
            ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging
            Activities" and No. 138 "Accounting for Certain Derivative
            Instruments and Certain Hedging Activities", an Amendment of FASB
            Statement No. 133 in June 1998 and June 2000, respectively. SFAS 133
            and 138 are effective for fiscal years beginning after June 15, 2000
            and require all derivatives to be recorded on the balance sheet at
            fair value. If the derivative instrument qualifies as a hedge,
            depending on the nature of the hedge, changes in fair value of the
            derivative will either be offset against the change in fair value of
            the hedged assets, liabilities, or firm commitments through earnings
            or recognized in other comprehensive income until the hedge item is
            recognized in earnings. The ineffective portion of a derivative's
            change in fair value will be immediately recognized in earnings. The
            adoption of SFAS 133 and 138 did not have any impact on the
            Company's financial position or results of operations.

            In July 2001, the Financial Accounting Standards Board issued SFAS
            No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and
            Other Intangible Assets." SFAS No. 141 is effective immediately and
            SFAS 142 will be effective January 2002. These new standards are not
            expected to have a significant impact on the Company's financial
            position or results of operations.

            The results of operations for the six months ended June 30, 2001 may
            not be indicative of the operating results for the year ending
            December 31, 2001.

Note 2:     Income taxes

            As of June 30, 2001, the Company had gross deferred tax assets of
            $6,741,699 offset by a deferred tax asset valuation allowance of
            $206,356. During the six months ended June 30, 2001, the Company
            reduced the deferred tax asset valuation allowance by $1,227,301
            which fully offset the provision for income taxes. 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 $6,535,343 of deferred tax assets will be realized.

            As of June 30, 2001, the Company had net operating loss
            carryforwards for federal and state income tax purposes of
            approximately $17,600,000 and $830,000, respectively. For federal
            and state tax purposes


                                       7
<PAGE>

            the net operating loss carryforwards expire from 2007 through 2013,
            and from 2001 through 2003, respectively.

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

Note 3:     Earnings per share

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

<TABLE>
<CAPTION>
                                                                              Three Months Ended             Six Months Ended
                                                                                    June 30,                     June 30,
                                                                            -------------------------------------------------------
                                                                                2001          2000          2001          2000
                                                                            -------------------------------------------------------
<S>                                                                         <C>             <C>         <C>             <C>
            Net income (loss)                                               $ 1,724,075   $   194,656   $ 3,068,252   $    (378,429)
                                                                            =======================================================

            Weighted average shares for basic net income (loss) per share    10,290,535    10,291,673    10,290,535     10,291,673
               Effect of dilutive stock options                                 157,141       175,105       141,948             --
                                                                            -------------------------------------------------------
            Weighted average shares for dilutive net income per share        10,447,676    10,466,778    10,432,483     10,291,673
                                                                            ===========   ===========   ===========   ============
            Basic net income (loss) per share                                     $0.17         $0.02         $0.30         $(0.04)
                                                                            ===========   ===========   ===========   ============
            Diluted net income (loss) per share                                   $0.17         $0.02         $0.29         $(0.04)
                                                                            ===========   ===========   ===========   ============
</TABLE>

            Options to purchase 1,083,700 shares of common stock were
            outstanding as of June 30, 2001 and December 31, 2000. For the three
            months and six months ended June 30, 2001, 594,700 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>
            ------------------------------------------------------------------------------------------------------------
                               Entity                  Ownership interest at                   Development
                                                           June 30, 2001
            ------------------------------------------------------------------------------------------------------------
            <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")                        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.


                                       8
<PAGE>

            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.

            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.

            PWA: Pursuant to the operating agreement of PWA, the Company was
            entitled to receive fifty percent of the profits of PWA, and the
            other member, RGC Associates, LLC ("RGC Associates"), was entitled
            to receive the remaining fifty percent of the profits. During May
            2001, the Company purchased all of RGC Associates ownership interest
            in PWA.

            During the six months ended June 30, 2001, $44,513 of the total loss
            of $46,338 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 the Company. 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, 2001 and December 31, 2000 was $103,318 and $58,805,
            respectively. As a result, the Company has recorded minority
            interest of $0 as of June 30, 2001 and December 31, 2000.


                                       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, 2001, the Company had remaining loan commitments from
financial institutions of approximately $43,900,000, 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, 2001, the Company had seven residential housing
projects in various stages of development, with five producing revenues from
completed homes: Parc Metropolitan, High Ridge Court, Saddlerock, Creekside
Estates, and Montserrat Classics. The remaining two projects, Parcwest
Apartments and McGuire Luxury Apartments are in various stages of development.
As of June 30, 2001, the Company has 285 homes under construction, of which 87
are in escrow to be sold, and 19 model units. Additionally, the Company has an
inventory of 454 lots under development.

            As of June 30, 2001, the Company had 87 units in escrow ("backlog")
compared with a backlog of 182 units as of June 30, 2000. The gross revenues of
such backlog was $31,920,000 and $57,440,000 as of June 30, 2001 and 2000,
respectively.

      On July 17, 2001, the Company obtained a three year working capital loan
in the amount of $5,000,000 from the Curci-Turner Company to be used primarily
for land acquisitions to support the company's growth programs.

            Based on its agreements with its lenders, the Company believes that
it will have sufficient liquidity to finance its construction projects in 2001
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 2001, minimize
operating expenses, and maintain control over costs. With regard to the debt
coming due in 2001, 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 2001.

Results of operations

            Real estate sales for the three months ended June 30, 2001 increased
162.0% to $26,757,550 from $10,214,099 for the three months ended June 30, 2000.
For the six months ended June 30, 2001, real estate sales increased 183.4% to
$50,429,686 from $17,797,462 in the year-earlier period. The increase in real
estate sales for the three and six month periods of 2001 was primarily due to
the high volume of inventory of completed homes available for sale in 2001
compared to completed homes available for sale in 2000. In the second quarter of
2001, the Company sold 76 homes with an average sales price of $352,200, a 81.0%
increase in the volume of home sales compared to 42 homes with an average sales
price of $243,200 for the second quarter of 2000. During the first six months of
2001, the Company sold 144 homes with an average sales price of $350,200, a
92.0% increase in the volume of home sales compared to 75 homes with an average
sales price of $237,300 for the six months of 2000.


                                       10
<PAGE>

            Gross profit increased to $2,380,158 in the second quarter of 2001
from $813,142 in the second quarter of 2000. For the six months ended June 30,
2001, gross profit increased to $4,425,995 from $490,303 in the corresponding
period of 2000. The significant increase of gross profit during the second
quarter of 2001 and six months ended June 30, 2001 results from the increase in
the number of home sales in the higher profit margin projects Parc Metropolitan
and Parkland Farms compared to the lower profit margin projects Summertree Park
and High Ridge Court primarily sold during 2000.

            General and administrative expenses increased to $695,344 in the
three months ended June 30, 2001 from $618,544 in the corresponding period. For
the six months ended June 30, 2001, general and administrative expenses
increased to $1,430,187 from $1,254,549 in the corresponding 2000 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 March 26, 2001 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, 2000 and unaudited consolidated financial statements for the quarter ended
December 31, 2000, and under item 7(c) a press release announcing Calprop
Corporations' 2000 annual and fourth quarter results.

            A Current Report on Form 8-K dated May 15, 2001 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, 2001, and under item 7(c) a press release announcing Calprop Corporations'
first quarter results.

            A Current Report on Form 8-K dated July 23, 2001 was filed with the
Securities and Exchange Commission (the "Commission") to announce an agreement
for a new $5 million, three-year working capital loan to be used primarily for
land acquisitions to support the company's growth programs.

                                   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 14, 2001


                                       12