UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

            [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2000        Commission File Number 1-6844
                                                                         -------
                               CALPROP CORPORATION

     Incorporated in California               I.R.S. Employer Identification No.
     13160 Mindanao Way, #180                           95-4044835
     Marina Del Rey, California  90292
     (310) 306-4314

        Securities Registered Pursuant to Section 12(b) of the Act: None

           Securities Registered Pursuant to Section 12(g) of the Act:
                           Common Stock, no par value

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 |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-K or any amendment to this
Form 10-K  |X|.

State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing.

                         $1,691,736 at January 31, 2001

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

                10,290,535 Shares Outstanding at January 31, 2001
                                                 ----------------

                      Documents Incorporated by reference:

Portions of the registrant's definitive Proxy Statement for 2001 Annual Meeting
of Shareholders are incorporated by reference into Part III of this report.

<PAGE>

                                     PART I

ITEM 1.  Business

General

   Calprop Corporation ("Calprop") designs, constructs and sells single-family
detached homes and townhomes as part of condominiums or planned unit
developments in California and Colorado. The Company selects and acquires the
site, secures construction financing and constructs and sells homes. The Company
also sells improved lots in California and Colorado. The Company selects
projects of varying types in several local markets in an effort to reduce the
risks inherent in the residential housing industry. To enable the Company to
adapt to the changing market conditions and to control its overhead expenses,
the Company performs its construction activities through independent
subcontractors under the direction of on-site construction supervisors employed
by the Company rather than employing a permanent construction work force. The
Company does not generally finance the purchase of its homes, but has done so in
the past to facilitate sales and may do so in the future to the extent it is
feasible, if market conditions require such financing. In addition to the
continuing emphasis on single-family construction, the Company also develops raw
land through the planning, zoning, and entitlement process.

   During 2000, the Company was primarily engaged in the development of lots,
and the construction and marketing of single-family detached homes and
townhomes. As of December 31, 2000, the Company had eight residential housing
projects in various stages of development, consisting of 341 homes and townhomes
under construction (128 were in escrow), 542 lots under development, and 19
model homes used in selling the various types of housing developed. The
Company's products range from homes for first-time buyers to custom homes.

Residential Housing Industry

   The residential housing industry includes several hundred developers and home
builders of various sizes and capabilities. The development process starts with
the acquisition of a raw parcel of land. The developer prepares preliminary
plans, environmental reports and obtains all necessary governmental approvals,
including zoning and conditional use permits before subdividing the land into
final tract maps and approved development plans. The subdivided parcel is then
graded and the infrastructure of roads, sewers, storm drains, and public
utilities are added to develop finished lots. Building permits are obtained and
housing is constructed, and then sold or rented. Residential housing is
constructed in a variety of types, including single-family detached homes
(ranging from the less expensive "first-time buyer" homes to the medium priced
"trade-up" homes to the more expensive "custom" homes), patio-homes (adjacent
homes with party walls), condominiums (owner-occupied multifamily housing), and
multifamily rental housing (apartments, retirement homes and other types of
nonowner occupied multifamily housing). Any of these types can be built as part
of a planned unit development with common areas such as green belts, swimming
pools and other recreational facilities for common use by occupants.

The Company's Strategy

   The Company's strategy has been to acquire land in or near major urban
centers in California and Colorado and to construct single-family housing for
resale. The Company does not specialize in the construction of a specific type
or design of housing and does not limit its operation to any specific location.
The Company usually acquires project sites which are zoned and subdivided so
that the Company can construct and sell single-family housing in a relatively
short period of time, usually two to three years. The Company will also acquire
raw land that is not zoned or subdivided for investment or for development by
processing it through the entitlement process to obtain zoning and other permits
necessary for development into single-family housing and other urban uses.


                                       2
<PAGE>

Future Projects

   As the Company intends to continue specializing in the construction and sale
of single-family and multifamily housing, the Company is continually considering
potential projects for development. In addition to the construction and sale of
single-family and multifamily housing, the Company is entering the market to
construct and lease single-family and multifamily housing. This market would
provide consistent cash flow in the cyclical industry of real estate
development. During 1999, the Company purchased land in the Northern California
area for the construction of apartments. The Company also entered into a ground
lease agreement for land for the construction of townhomes in the Southern
California area for lease. The following discussion is the process which the
Company follows to acquire land, entitle, market and build residential housing
projects.

Land Acquisition and Construction

   In considering the purchase of land for the construction of housing, the
Company takes various factors into account, including, among others, population
growth patterns, availability of utilities and community services such as water,
gas, electricity, sewer, transportation and schools, the estimated absorption
rate for new housing, estimated costs of construction and success of the
Company's past projects in and familiarity with the area.

   The Company's long-term strategy is to acquire or option project sites which
are properly zoned and subdivided so that the Company can construct and sell
single-family housing in a relatively short period of time, usually less than
three years, after acquiring the land. Larger projects are constructed in
phases, and the Company determines the number of homes in each phase based upon
the estimated costs of construction and estimated sales schedule. The division
of a project into phases may also be required by the project construction
lender. Although a construction and marketing schedule is established for all
phases at the commencement of a project, the precise timing of construction of
each phase depends on the rate of sales of homes in previous phases.

   In certain instances, the Company purchases land which is not substantially
ready for construction. Depending on the stage of development of the parcel, the
Company might be required to obtain necessary entitlements to subdivide the
parcel of land; these entitlements include environmental clearances, zoning,
subdivision mapping, permits and other governmental approvals. After the
entitlement process the Company would then develop the land through grading lots
and streets, and building the infrastructure of water, sewer, storm drains,
utilities, curbs, streets, and possibly amenities, such as parks, pools and
recreational facilities.

   The Company acts as its own general contractor, and its supervisory employees
coordinate all work on a project. The services of independent architectural,
design, engineering and other consulting firms are engaged to assist in the
pre-construction aspects of the project. The Company's construction activities
are conducted through independent subcontractors, under fixed-price contracts,
operating in conformity with plans, specifications and detailed drawings
furnished by the Company and under the direction of on-site construction
supervisors employed by the Company. Generally, the Company solicits bids from
several potential subcontractors and awards a contract for a single phase of a
project based on the subcontracting bid as well as the Company's knowledge of
the subcontractor's work and reputation. Subcontracting enables the Company to
retain the necessary flexibility to react to changes in the demand for housing,
and to utilize the management strengths, specialization capabilities, equipment
and facilities of its subcontractors without large capital investments of its
own.

   The Company does not have long-term contractual commitments with any of its
subcontractors, consultants or suppliers of materials. The Company selects
subcontractors who it believes will perform the required work in a timely manner
and whose quality of workmanship meets the Company's standards. Although some
subcontractors employ unionized labor, the Company has not signed a master labor
agreement or experienced any significant delays in construction as a result of
strikes or stoppages; however, there can be no assurances that the Company will
not experience such delays in the future.

   The Company secures raw materials, fixtures and furnishings directly or
through its subcontractors from customary trade sources. Although certain
products have been in short supply from time to time, such shortages have not
impaired the Company's ability to conduct its business in the past and are not
expected to do so in the foreseeable future.


                                       3
<PAGE>

Marketing

   The Company's marketing department coordinates the design of the homes to be
built and the interior design of model units and the design and preparation of
advertising materials. The Company builds, landscapes and furnishes model units
for public display. After each project is sufficiently completed so as to permit
retail sales to begin, the Company selects a realtor or realty company to market
homes which are under construction or completed.

   Projects in which product is currently in the marketing stage are Montserrat
Classics and Saddlerock. All such projects are being marketed through realtors
who have no other affiliation with the Company.

Warranties

   The Company provides a one-year express warranty against defects in
workmanship and materials to purchasers of homes in its projects. In addition,
California and Colorado law provides the Company's customers certain implied
warranties, the scope and duration of which exceed the Company's express
warranties. The Company requires its subcontractors to indemnify the Company in
writing and requires the insurance of the subcontractor to provide that the
Company is a primary insured and an additional insured from its subcontractors
for liabilities arising from their work, except for liability arising through
the sole negligence or willful misconduct of the Company or from defects in
designs furnished by the Company. Nevertheless, the Company is primarily liable
to its customers for breach of warranty. The Company has builder's product
liability insurance coverage which it believes to be adequate in light of the
Company's claims history.

   Schedule II to the financial statements sets forth the Company's warranty
reserves which the Company believes are adequate. Normal warranty costs are
accrued at the close of escrow and held on a project until two years after the
project is completed and all completion bonds posted with governmental agencies
are released.

Financing

   Generally, the Company acquires a project site for a purchase price paid with
cash or a combination of cash and short-term acquisition financing secured by
the project site. The amount and terms of financing vary from project to
project.

   After final working drawings from architects are prepared, the Company
obtains a construction loan, secured by the portion of the project site to which
the loan relates. The Company's construction loans are used to finance projected
construction costs. In order to obtain the construction loan, the Company must
repay all acquisition financing or obtain a reconveyance of that portion of the
project site which is used to secure the construction loan. The construction
loan is due and payable shortly after completion of the construction being
financed. The Company repays construction financing from the proceeds of project
unit sales. The construction financing provides for release of individual lots
for sale during the term of the financing upon partial repayment of principal in
a specified amount per lot. All cash sales proceeds in excess of the specified
release amount are retained by the Company. If the Company experienced a delay
in unit sales following construction and was unable to extend the term of its
construction financing, the Company would be required to repay the construction
financing or obtain other financing in order to hold the unsold units until
market conditions improved. Although the Company does not arrange third-party
financing for its customers, it has provided secured purchase money financing
from time to time to the extent required by market conditions. In addition, the
Company in the future may also subsidize home purchasers, as an alternative to
providing direct financing, by "buying down" the interest rate on loans from
lending institutions, the extent and amount of which would depend upon
prevailing market conditions and interest rate levels at the time.

   The Company usually receives the full sales price for its homes in cash at
the closing of purchase escrows. Most of the Company's home purchasers obtain
conventional financing from independent financial institutions. Depending upon
the price range of the homes in a particular project and the prevailing mortgage
market in the area, the financing obtained by the Company's qualifying home
purchasers may be insured either by the Federal Housing Administration ("FHA")
or guaranteed by the Veterans Administration ("VA"). As a result of government
regulations, FHA and VA financing of the purchase of homes from the Company is
limited because, among other things, the loan amount may not exceed certain
specified levels.

Competition

   The home building industry is highly competitive, particularly in the large
urban areas of California. In each of the areas in which it operates, the
Company competes in terms of location, design, quality, price and available
mortgage financing with numerous other residential construction firms, including
large


                                       4
<PAGE>

national and regional firms, many of which have greater financial resources than
the Company. The Company believes that no single competitor dominates any single
market area served by the Company.

   For projects in master planned developments, the Company's units are adjacent
to those of other builders and usually marketed at the same time through
participation in joint advertising programs. While this often increases direct
competition for the Company, it also attracts a larger group of potential
purchasers than would be the case if the Company advertised by itself.

Business Risks

   The development, construction and sale of single-family homes generally are
subject to various risks, including, among others, possible changes in the
governmental structure of the project locality, possible shortages of suitable
undeveloped land at reasonable prices, unfavorable general and local economic
conditions such as employment conditions and income levels of the general
population, adverse local market conditions resulting from such unfavorable
economic conditions or competitive overbuilding, increases in prevailing
interest rates, increases in real estate taxes and the cost of materials and
labor, and the availability of construction financing and home mortgage
financing attractive to home purchasers. In addition, the demand for residential
housing depends in part on the tax consequences of home ownership to home
purchasers. There have been various tax legislation proposals before Congress
over the past few years which could reduce the tax advantages currently
associated with home ownership. There can be no assurances that any such
legislation, if enacted, would not adversely impact the residential housing
industry in general or the Company's business and results of operations.

   The Company's business in particular depends upon the successful completion
of construction and sale of homes on established schedules. Construction and
sale schedules may be adversely affected by a variety of factors which are not
within the Company's control, including the factors described above, inclement
weather conditions, earthquakes, labor and material shortages and strikes.
Although the Company has not experienced any serious labor or material shortages
in recent years, the residential housing industry from time to time experiences
serious labor and material shortages.

Governmental Regulations

   The residential housing industry is also subject to increasing environmental,
building, zoning and real estate sales regulation by various federal, state and
local governmental authorities. Such regulations affect home building by
specifying, among other things, the type and quality of building material which
must be used, certain aspects of land use and building design, as well as the
manner in which the Company conducts its sales, lending activities and other
dealings with its customers. For example, the Federal Consumer Credit Protection
Act requires, among other things, certain disclosures to purchasers about
finance charges in credit transactions, such as sales financed by the Company.
California law requires that full information concerning certain subdivisions be
filed with the California Real Estate Commissioner, and in such instances no
sales may be made to the public until the Commissioner has issued a public
report which is delivered to purchasers. Because the Company's competitors are
also subject to the foregoing regulation, the Company believes that it is not
placed at a competitive disadvantage, except to the extent that competitors with
greater financial resources and greater volume of development activity may more
readily withstand longer delays and increased costs in the development of
projects.

   Although the strategy of the Company is to build homes on land which is
already subdivided, zoned and improved with utilities, the Company occasionally
undertakes projects which entail the subdivision of partially improved land. In
such cases the Company is required to obtain the approval of numerous
governmental authorities regulating such matters as permitted land uses and
levels of population density, access to utility services such as water and waste
disposal, and the dedication of acreage for open space, parks, schools and other
community purposes. Furthermore, changes in prevailing local circumstances or
applicable law, including moratoria, zoning changes and other governmental
actions, can require additional approvals or modification of approvals
previously obtained. As a result of such regulation, the time between the
original acquisition and the commencement and completion of a project can
increase significantly. Furthermore, the commencement or completion of a project
could be precluded entirely, in which case the Company would sustain a
substantial loss on the project.

Employees

   The Company has approximately fifty four full-time employees, including five
executive officers, twenty eight persons in its finance, marketing and
operations departments, and twenty one field superintendents and general
laborers. The Company also employs temporary and part-time laborers from time to
time as necessary. None of the Company's employees is currently represented by a
collective bargaining unit. The Company compensates its employees with salaries
and fringe benefits that it believes are competitive


                                       5
<PAGE>

with the building industry and the local economy. The Company believes that
relations with its employees generally are excellent.

Licensing

   The Company is licensed by the State of California as a general building
contractor, and this license is essential to its operations. This license must
be renewed every two years. The Company's current license expires in July 2002
and the Company expects to renew its license on or before expiration.

ITEM 2.  Properties

Current projects

   The table below sets forth certain information relating to the Company's
current projects as of December 31, 2000 and certain information relating to the
Company's development operations during the previous twelve months.
<TABLE>
<CAPTION>

                                                 Units      Units       Units     Units sold     Remaining
                                                 sold       under     completed   subject to      units to
                                               12 months construction and unsold  construction  construct
                                                 ended      as of       as of        as of          as of
Project                                         12/31/00  12/31/00    12/31/00     12/31/00       12/31/00
-------                                        -------------------------------------------------------------
<S>                                                <C>        <C>        <C>          <C>            <C>
1.   Antares                                         1        --         --           --             --
2.   Summertree Park                                29        --         --           --             --
3.   Montserrat Classics                            --        28         --           --             77
4.   Creekside Estates (Mockingbird Canyon)          5        15         --            8             11
5.   Parkland Farms                                 60        20         --           20             --
6.   Parc Metropolitan                              78       260         --           92             44
7.   Parcwest                                       --        --         --           --             68
8.   High Ridge Court                               45        18         --            8             86
9.   Saddlerock                                      1        19         --           --             74
10.  McGuire Luxury Apartments                      --        --         --           --            182
11.  Mission Gorge                                  --        --         --           --             --
                                               -------------------------------------------------------------
                                                    219      360         --          128            542
                                               =============================================================

Total inventory units as of 12/31/00 (including 19 model units)                                     902
                                                                                                 =========
</TABLE>

Backlog- As noted in the above table, the total number of units sold subject to
construction ("backlog") at December 31, 2000, was 128 units, with gross
revenues of such backlog equal to $49,456,600. As of March 11, 2001, the backlog
was 117 units, representing $43,900,000 compared to a backlog of 166 units
representing $45,750,000 as of March 12, 2000. See also "Management Discussion
and Analysis of Financial Condition and Results of Operations" for additional
discussion of Real Estate Sales for 2000 and 1999.

1. Antares (Del Mar Heights, San Diego County, California)

   The Antares project, formerly Elysian 2, consists of 100 units of
single-family detached housing. The project consists of three models ranging
from 1,212 to 1,567 square feet with base sales prices before lot premiums or
sales incentives of $210,500 to $310,500. The Company closed escrow on all units
as of December 31, 2000.

   The project is located about 20 miles north of San Diego along Interstate 5.

   In 1996, the Company formed DMM with RGC Courthomes, Inc., a California
Corporation, ("RGC"). In December, 1996, 100 lots in the Antares project were
acquired by DMM. The profits and losses of DMM are to be distributed between the
members as follows, 33.3% to RGC and 66.7% to the Company.

   The Company's construction loans for the 100 units was secured by Imperial
Bank in 1997. The loans


                                       6
<PAGE>

permitted borrowings by the Company of $17,029,313 on this project and bore
interest at the bank's reference rate plus 1.5%. The loan was repaid in 1999.

   The Company had an acquisition loan with the Curci-Turner Company on the
entire 100 lots of the project. The loan permitted borrowing by the Company of
$3,050,000 on this project and bore interest at 12%. The loan contains a profit
sharing provision in the amount of 33.3% of "net proceeds" as defined in the
agreement. As of December 31, 2000, the loan had been paid in its entirety.

2. Summertree Park (Elk Grove, Sacramento County, California)

   The Summertree Park project consisted of 120 units of single-family detached
housing. The Company closed escrow on all units as of December 31, 2000.

   The project is located about 20 miles south of Sacramento along Highway 99.

   The Company's construction loan for the fifth and sixth phase of construction
was secured with Imperial Bank in 1999. The loan permited borrowing by the
Company of $4,425,000 on this project and bore interest at the bank's reference
rate plus 1.0%. As of December 31, 2000, the loan had been paid in its entirety.

   The Company had an acquisition/construction loan with the Curci-Turner
Company on the entire 120 lots of the project. The loan permited borrowing by
the Company of $4,000,000 on this project and bore interest at the prime plus
1.5%. The loan contained a profit sharing provision in the amount of 40% of "net
proceeds" as defined in the agreement. As of December 31, 2000, the loan had
been paid in its entirety.

3. Montserrat Classics (Murrieta, Riverside County, California)

   The Montserrat Classics project consists of 105 lots. The Company is building
single-family homes averaging 2,280 to 3,411 square feet with average sales
prices before lot premiums or sales incentives of $229,900 to $289,900. As of
December 31, 2000, the Company had 77 lots under development, 25 units under
construction, and three models.

   The project is located about 65 miles southeast of Los Angeles along Highway
15.

   The Company has an acquisition/construction loan with the Curci-Turner
Company on the entire 105 lots of the project. The loan permits borrowing by the
Company of $3,450,000 on this project and bears interest at 12%. The loan
contains a profit sharing provision in the amount of 50% of "net proceeds" as
defined in the agreement. As of December 31, 2000, $3,450,000 of the principal
of this loan was outstanding.

   The Company's construction loan on the 52 units in the first and second phase
of construction was secured in 2000 with Imperial Bank. The loan permits
borrowing by the Company of $12,465,000 and bears interest at the prime plus
1.0%. As of December 31, 2000, the outstanding principal of this loan was
$3,551,408, and the Company had available $8,520,448. The Company believes these
funds are adequate to complete the construction of the first two phases of
construction.

4. Mockingbird Canyon (Unincorporated Territory of Riverside County, California)

   The Mockingbird Canyon project consists of 31 lots. The project consists of
single-family homes averaging 3,694 to 4,137 square feet with average sales
prices before lot premiums or sales incentives of $409,900 to $451,900. As of
December 31, 2000, the Company had eleven lots under development, 14 units under
construction (eight were in escrow), and one model.

   The project is located about 90 miles east of Los Angeles and 30 miles south
of San Bernardino along Interstate 15.

   The Company has an acquisition/construction loan with the Curci-Turner
Company on the entire 31 lots of the project. The loan permits borrowing by the
Company of $3,500,000 on this project and bears interest at 12%. The loan
contains a profit sharing provision in the amount of 50% of "net proceeds" as
defined in the agreement. As of December 31, 2000, $2,608,912 of the principal
of this loan was outstanding.

   The Company's construction loan on the entire 31 units was secured in 2000
with Imperial Bank. The loan permits borrowing by the Company of $10,000,000 and
bears interest at the prime plus 1.0%. As of December 31, 2000, the outstanding
principal of this loan was $5,641,625, and the Company had available $2,130,213.
The Company believes these funds are adequate to complete the construction of
the project.


                                       7
<PAGE>

5. Parkland Farms (Healdsburg, Sonoma County, California)

     The Parkland Farms project, formerly Parkland Hills, consists of 115 units
of single-family detached housing. The project consists of three models ranging
from 1,488 to 1,926 square feet with base sales prices before lot premiums or
sales incentives of $299,900 to $329,900. As of December 31, 2000, the Company
had 20 units under construction (all units were in escrow).

   The project is located about 75 miles north of San Francisco along highway
101.

   In 1998, the Company formed Parkland Farms Development Co., LLC, a California
limited liability company, ("Parkland") with an officer of the Company. In
September, 1998, 115 lots in the Parkland Farms project were acquired by
Parkland. The profits and losses of Parkland are to be distributed between the
members as follows: 1% to Partner and 99% to the Company.

   The Company has acquisition/construction loans with the Curci-Turner Company
on the entire 115 lots of the project. The loans permit borrowing by the Company
of $4,808,201 on this project and bears interest at 12%. The loan contains a
profit sharing provision in the amount of 50% of "net proceeds" as defined in
the agreement. As of December 31, 2000, the loan had been paid in its entirety.

   The Company's construction loan on the 45 units in the first and second phase
of construction was secured in 1998 with Imperial Bank. The loan permits
borrowing by the Company of $14,679,000 and bears interest at the prime plus
1.0%. As of December 31, 2000, the loan had been paid in its entirety.

   The Company's construction loan on the remaining 70 units, phases three
through five was secured in 1999 with Imperial Bank. The loan permits borrowing
by the Company of $15,628,616 and bears interest at the prime plus 1.0%. As of
December 31, 2000, the outstanding principal of this loan was $1,775,269 and the
Company had available $1,250,287. The Company believes these funds are adequate
to complete the construction of the last three phases of construction.

6. Parc Metropolitan

   The Parc Metropolitan project consists of three separate projects/products,
Product A, Product B, and Product C for a total of 382 units.

   Product A consists of 130 townhomes. The project consists of two models
ranging from 1,404 to 1,764 square feet with base sales prices before lot
premiums or sales incentives of $432,900 to $540,900.

   Product B consists of 108 townhomes. The project consists of six models
ranging from 1,012 to 1,369 square feet with base sales prices before lot
premiums or sales incentives of $354,900 to $420,900.

   Product C consists of 144 townhomes. The project consists of two models
ranging from 1,353 to 1,534 square feet with base sales prices before lot
premiums or sales incentives of $407,900 to $470,900.

   As of December 31, 2000, the Company had 44 lots under development, 250 units
under construction (92 were in escrow), and ten models.

   The project is located approximately 45 miles south of San Francisco along
highway 880 in the Silicon Valley area.

   In 1998, the Company formed RGCCLPO Development Co., LLC, a California
limited liability company, ("RGCCLPO") with RGC. In September, 1998, 382 lots in
the Metropolitan project were acquired by RGCCLPO. The profits and losses of
RGCCLPO are to be distributed between the members as follows, 50% to RGC and 50%
to the Company. During 1999, the Company acquired RGC's 50% partnership interest
in RGCCLPO to attain 100% ownership as of December 31, 1999.

   The Company acquired the land through seller financing with Ford Motor
Company and Ford Motor Land Development Corporation on the entire 382 lots and
the land for the Parcwest Apartments project. The original note balance of
$12,850,000 bears interest at 9%. As of December 31, 2000, $2,551,015 was
outstanding.


                                       8
<PAGE>

   The Company's acquisition and development loan on the entire 382 lots of the
project was secured in 1998 with Lowe Enterprises Residential Advisors,
("Lowe"). The loan permits borrowing by the Company of $9,700,000 and bears
interest at the prime plus 2.0%. After repayment of principal and interest, Lowe
will receive, as participating interest, a 27% IRR calculated on an annual
basis. As of December 31, 2000, the outstanding principal of this loan was
$9,700,000.

   The Company's construction loan on the first phase of construction for
Product A was secured with Imperial Bank in 1998. The loan permits borrowing by
the Company of $13,773,142 on this project and bears interest at the bank's
reference rate plus 1.0%. As of December 31, 2000, the outstanding principal of
this loan was $112,493, and the Company had available $34,874. The Company
believes these funds are adequate to complete the construction of the first
phase of construction.

   The Company's construction loan on the first phase of construction for
Product B was secured with Imperial Bank in 1999. The loan permits borrowing by
the Company of $10,604,352 on this project and bears interest at the bank's
reference rate plus 1.0%. As of December 31, 2000, the outstanding principal of
this loan was $8,521,504, and the Company had available $2,111,288. The Company
believes these funds are adequate to complete the construction of the first
phase of construction.

   The Company's construction loan on the first phase of construction for
Product C was secured with Imperial Bank in 1999. The loan permits borrowing by
the Company of $12,342,388 on this project and bears interest at the bank's
reference rate plus 1.0%. As of December 31, 2000, the outstanding principal of
this loan was $1,167,972, and the Company had available $1,390,110. The Company
believes these funds are adequate to complete the construction of the first
phase of construction.

   The Company's construction loan on the second phase of construction for
Product A was secured with Imperial Bank in 2000. The loan permits borrowing by
the Company of $13,612,993 on this project and bears interest at the bank's
reference rate plus 1.0%. As of December 31, 2000, the outstanding principal of
this loan was $9,109,202, and the Company had available $4,218,083. The Company
believes these funds are adequate to complete the construction of the second
phase of construction.

   The Company's construction loan on the second phase of construction for
Product B was secured with Imperial Bank in 2000. The loan permits borrowing by
the Company of $10,661,232 on this project and bears interest at the bank's
reference rate plus 1.0%. As of December 31, 2000, the outstanding principal of
this loan was $4,853,100 and the Company had available $5,539,269. The Company
believes these funds are adequate to complete the construction of the second
phase of construction.

   The Company's construction loan on the second phase of construction for
Product C was secured with Imperial Bank in 2000. The loan permits borrowing by
the Company of $12,897,860 on this project and bears interest at the bank's
reference rate plus 1.0%. As of December 31, 2000, the outstanding principal of
this loan was $6,811,538, and the Company had available $5,007,662. The Company
believes these funds are adequate to complete the construction of the second
phase of construction.

7. Parcwest

   The Parcwest project consists of 68 lots. The Company is in the preliminary
planning stages of the project to start construction in 2001.

   The project is located approximately 45 miles south of San Francisco along
highway 880 in the Silicon Valley area.

   In 1999, the Company formed PWA Associates, LLC, a California limited
liability company, ("PWA") with RGC Associates, LLC (RGC Associates). In
December, 1999, 68 lots in the Parcwest project were acquired by PWA. The
profits and losses of PWA are to be distributed between the members as follows,
50% to RGC Associates and 50% to the Company.

   The Company has an acquisition loan with the City of Milpitas. The loan
permits borrowing by the Company of $1,000,000 on this project and bears
interest at 6.35%. As of December 31, 2000, $1,000,000 of the principal of this
loan was outstanding.

8. High Ridge Court

   The High Ridge Court project, formerly Hunters Chase, consists of 170 units
of single-family detached housing. The project consists of three models ranging
from 1,146 to 1,884 square feet with base sales prices before lot premiums or
sales incentives of $169,900 to $203,900. As of December 31, 2000, the Company
had 86 lots under development, 15 units under construction (8 were in escrow),
and three models.


                                       9
<PAGE>

   The project is located approximately 3 miles west of I-25 in the city of
Thornton.

   The Company has an acquisition loan with the Curci-Turner Company on the
entire 170 lots of the project. The loan permits borrowing by the Company of
$4,250,000 on this project and bears interest at 12%. The loan contains a profit
sharing provision in the amount of 50% of "net proceeds" as defined in the
agreement. As of December 31, 2000, $3,084,491 of the principal of this loan was
outstanding.

   The Company's acquisition and development loan for the remaining three phases
of the project was secured in 1999 with First American Bank Texas. The loan
permits borrowing by the Company of $2,041,000 and bears interest at the prime
rate plus 1.0%. As of December 31, 2000, the outstanding principal of this loan
was $1,063,595, and the Company had available $322,497. The Company believes
these funds are adequate to complete the land development of phases three
through five.

   The Company's revolving construction loan on the entire 170 lots of the
project was secured in 1998 with First American Bank Texas. The revolving loan
permits the Company to have a maximum outstanding balance of $5,000,000 for the
construction of the High Ridge and Saddlerock projects. The loan bears interest
at the prime rate plus 1.0%. As of December 31, 2000, the outstanding principal
balance of the High Ridge construction loan was $1,251,646.

9. Saddlerock

   The Saddlerock project consists of 94 units of single-family detached
housing. The project consists of two models ranging from 1,899 to 2,900 square
feet with base sales prices before lot premiums or sales incentives of $289,900
to $356,900. As of December 31, 2000, the Company had 74 lots under development,
17 units under construction, and two models.

   The project is located adjacent to highway E470 approximately 7 miles east of
I-25 in the city of Aurora.

   The Company has an acquisition/construction loan with the Curci-Turner
Company on the entire 94 lots of the project. The loan permits borrowing by the
Company of $3,000,000 on this project and bears interest at 12%. The loan
contains a profit sharing provision in the amount of 50% of "net proceeds" as
defined in the agreement. As of December 31, 2000, $2,600,000 of the principal
of this loan was outstanding.

   The Company's acquisition and development on the entire 94 lots of the
project was secured in 1998 with First American Bank Texas. The loan permits
borrowing by the Company of $2,606,800 and bears interest at the prime plus
1.0%. As of December 31, 2000, the loan had been paid in its entirety.

   The Company's revolving construction loan on the entire 94 lots of the
project was secured in 1998 with First American Bank Texas. The revolving loan
permits the Company to have a maximum outstanding balance of $5,000,000 for the
construction of the Saddlerock and High Ridge projects. The loan bore interest
at the prime plus 1.0%. During 2000, the construction loan for the remaining
units was refinanced and secured with Imperial Bank. The loan permits borrowing
by the Company of $13,538,913 on this project and bears interest at the bank's
reference rate plus 1.0%. As of December 31, 2000, the outstanding principal of
this loan was $6,230,976 and the Company had available $6,635,665. The Company
believes these funds are adequate to complete the construction of the remaining
units under construction.

10. McGuire Luxury Apartments (San Diego, California)

   The McGuire project consists of 182 units of single-family attached housing
for lease. The Company entered into a 50 year ground lease agreement with an
option to extend 20 additional years and the right of first refusal to purchase
the land.

   The project is located about 20 miles north of San Diego along Interstate 5.

   In 1999, the Company formed RGC Carmel Country Associates, LLC, a California
limited liability company, ("RGC Carmel") with RGC. The profits and losses of
RGC Carmel are to be distributed


                                       10
<PAGE>

between the members as follows, 50% to RGC and 50% to the Company. During 2000,
RGC Carmel admitted additional members in the following proportions: The John L.
Curci Trust as to a 12.5% interest, The Janet Curci Living Trust No. Il as to a
12.5% interest, and an officer of the Company as to a 25% interest. As a result,
the Company's interest in RGC Carmel was reduced to 25%.

11. Mission Gorge (San Diego, San Diego County, California)

   In 1987, the Company purchased approximately 200 acres of land in San Diego.
The previous owners, as a part of a group of property owners, had entered into
an option agreement with another developer to acquire the group's property, upon
obtaining an Amended Community Plan for the community in which the property is
located. At the present time, the Amended Community Plan has not been completed.
The Company is actively pursuing alternative land development opportunities.

      The Company formed Mission Gorge, LLC, a California limited liability
company, with the Curci-Turner, LLC for the purposes of developing the 200 acres
of the Mission Gorge project. The net proceeds are to be divided equally, as
defined in the operating agreement, among the two members, Calprop and
Curci-Turner, LLC. In December 2000, the Curci-Turner, LLC made a distribution
of its 50% interest to the members of Curci-Turner, LLC in the following
proportions: The John L. Curci Trust as to a 25% interest and The Janet Curci
Living Trust No. II as to a 25% interest.

ITEM 3. Legal Proceedings


   There are no pending legal proceedings to which the Company is a party or to
which any of its properties are subject other than routine litigation incidental
to the Company's business, none of which is considered by the Company to be
material to its business or operations.

ITEM 4. Submission of Matters to a Vote of Security Holders

   No matters were submitted to a vote of Company's security holders during the
fourth quarter of 2000.


                                       11
<PAGE>

                                     PART II

ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters

   Transactions in the Company's common stock, its only class of common equity
security, are quoted on the OTC Bulletin Board under the symbol CLPO.

                                     First     Second       Third       Fourth
                                    Quarter    Quarter     Quarter      Quarter
                                   ---------   -------     -------     --------
2000 stock price
  range-
    High                           $   1.53    $   1.37    $   1.50    $   1.31
    Low                                1.19        1.25        1.25        1.00

1999 stock price
  range-
    High                           $   1.63    $   2.00    $   2.31    $   2.06
    Low                                1.38        1.50        2.00        1.56

As of January 31, 2001, there were 498 record holders of common stock.

Dividends:     There have been no cash dividends declared in the past two years,
               nor was there a stock dividend declared during 2000 or 1999. The
               dividend policy, whether cash or stock, is reviewed by the Board
               of Directors on an annual basis. During 2000, there were no
               restrictions, as a result of a loan or other agreement, limiting
               the Company's ability to issue a dividend.


                                       12
<PAGE>

ITEM 6.  Selected Financial Data

   The following data should be read in conjunction with the financial
statements of the Company and the related notes thereto which are included
elsewhere in this Form 10K and in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations," which is also
included elsewhere in this Form 10K.

                FOR THE FIVE YEAR PERIOD ENDED DECEMBER 31, 2000
<TABLE>
<CAPTION>
                               2000          1999           1998          1997           1996

<S>                        <C>            <C>           <C>            <C>            <C>
SALES AND OPERATING
   REVENUE                 $64,238,615   $52,598,849    $33,071,722   $22,908,649     $13,717,126

NET INCOME (LOSS)            3,627,940      (752,582)    $5,368,006    (1,620,211)     (9,200,342)

BASIC INCOME (LOSS) PER
   COMMON SHARE                  $0.35        $(0.07)         $0.54        $(0.18)         $(1.28)

DILUTED INCOME (LOSS) PER
   COMMON SHARE                  $0.35        $(0.07)         $0.52        $(0.18)         $(1.28)

AS OF DECEMBER 31:

TOTAL ASSETS              $108,337,512   $87,817,643    $72,521,889   $30,956,802     $27,533,378

LONG TERM OBLIGATIONS     $  1,000,000   $17,201,168    $24,037,842   $14,267,931     $14,993,355
</TABLE>


                                       13
<PAGE>

ITEM 7. 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.

   The Company began experiencing difficulties due to the downturn in the
California real estate market during the second quarter of 1990, and through
1996 the Company continued to be impacted by the general economic downturn. In
response to these conditions the Company began utilizing marketing programs
which included price reductions and incentives to potential buyers. During 1997
however, the California real estate market began to experience a recovery. In
general, the Company's products were well received, exemplified by an increase
in the number of units sold subject to construction ("backlog") at December 31,
2000, 1999, and 1998 of 128, 88, and 123 units, respectively compared to 33
units as of 1996. Additionally, the Company's real estate sales increased from
$33,071,722 in 1998 to $52,598,849 in 1999, and to $64,238,615 in 2000. The
increase in real estate sales between 1998, 1999, and 2000 is primarily
attributable to an increase in units available for sale resulting from an
increase in production. Units increased from 162 in 1998 to 226 in 1999, and
decreased to 219 in 2000.

   The Company increased its gross profit to $5,676,912 in 2000 from $2,356,734
in 1999. As a percentage of real estate sales, gross profit increased by 4.36
percentage points to 8.84% in 2000 compared to 4.48% in 1999. The significant
increase of gross profit as a percentage of gross revenues during 2000 from 1999
results from the increase in the number of home sales in the higher profit
margin projects in 2000 compared to 1999. The Company decreased its gross profit
to $2,356,734 in 1999 from $2,627,524 in 1998. As a percentage of real estate
sales, gross profit decreased by 3.46 percentage points to 4.48% in 1999
compared to 7.94% in 1998. The significant decrease of gross profit as a
percentage of gross revenues during 1999 results from the increase in the number
of home sales in the lower profit margin projects Summertree Park and Antares
compared to the higher profit margin project Montserrat Estates primarily sold
during 1998. In addition, the Cierra Del Lago project which completed
construction in early 1998 and all homes were sold in the third quarter of 1998
had incurred warranty costs of approximately $615,000 recognized in 1999.

   The 1999 impairment loss on the Summertree Park, Elk Grove project is
primarily a result of the introduction of two new product lines 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 Company closed escrow on all units as of December 31, 2000.

Results of operations

   The Company had income before benefit for income taxes of $3,486,452 in
2000, a loss before benefit for income taxes of $2,435,955 in 1999, and income
before benefit for income taxes of $594,306 in 1998. The income in 2000 is
primarily due to increase in profit from operations as the Company began selling
homes in its Parc Metropolitan project. The net loss suffered in 1999 is
primarily a reflection of the recognition of asset impairment of the Summertree
Park, Elk Grove project in the amount of $2,519,521. The change from a loss to
income in 1998 is primarily due to increase in profit from operations as the
Company began selling homes in its Cierra Del Lago and Montserrat Estates
projects.


                                       14
<PAGE>

   Real estate sales increased to $64,238,615 in 2000 from $52,598,849 in 1999,
up 22%. Real estate sales were $33,071,722 in 1998. In 2000, the Company sold
219 homes, with an average sales price of $293,327. In 1999, the Company sold
226 homes, with an average sales price of $232,738. In 1998, the Company sold
162 homes, with an average sales price of $204,146.

   The overall gross profit percentage before recognition of impairment loss of
the Company was 8.8%, 4.5%, and 7.9% in 2000, 1999, and 1998, respectively.

   General and administrative expenses were $2,637,496 in 2000 and $2,309,225 in
1999, up 14.2%. General and administrative expenses were $1,752,909 in 1998. The
increase in 2000 from 1999 is the result of an increase in payroll costs, and
increased accounting costs due to the growth of the Company.

   Benefit for income taxes of $141,488 in 2000 includes the utilization of
unrecognized deferred income tax benefit of $1,538,994 to offset current year
income taxes. The remaining benefit for income taxes of $141,488 represents the
net refund resulting from a claim filed for the carryback of losses related to
certain qualifying expenses incurred in 1994. Benefit for income taxes in 1999
of $1,683,373 includes the utilization of unrecognized deferred income tax
benefit of $871,775 to recognize a deferred tax asset. The recognized deferred
tax asset is based upon expected utilization of net operating loss
carryforwards.

Liquidity and capital resources

   As of December 2000, the Company has loans outstanding to financial
institutions, secured by the development projects' trust deeds, with rates
ranging from 6.25% to prime plus 2.0% and maturing January 2001 through July
2029. As of December 31, 2000, the outstanding balances owing on these loans
totaled $66,341,488.

   As of December 31, 2000, the Company had remaining loan commitments from
banks and financial institutions of approximately $40,746,000, 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 December 31, 2000, the Company does not have any material commitments
for capital expenditures in 2000.

   Related-Party Notes - The Company has the following notes payable to Curci at
December 31, 2000 and 1999. Under the terms of certain of the notes payable,
Curci participates in "Net Proceeds" from certain projects, as defined in the
loan agreement, which is comparable to net profit:

                                                    December 31,    December 31,
Project                               Profit share      2000            1999
--------------------------------      ------------  ------------   -------------
Summertree Park                            40%      $        --    $   860,150
Antares                                    33%               --             --
Montserrat                                 50%               --             --
Parkland Farms                             50%               --      2,999,888
High Ridge Court                           50%        3,084,491      2,196,261
Saddlerock                                 50%        2,600,000      2,350,000
Mockingbird Canyon                         50%        2,608,912      2,750,000
Montserrat Classics                        50%        3,450,000      3,450,000
                                                    -----------    -----------
                                                     11,743,403     14,606,299
                                                    -----------    -----------
Other:
  Unsecured loans                                     2,129,357      1,604,250
                                                    -----------    -----------
                                                    $13,872,760    $16,210,549
                                                    ===========    ===========

   During 1999, the Company purchased RGC's fifty percent ownership in RGCCLPO.
Consideration for the purchase consisted of issuance of a note payable for
$2,000,000 and payment of cash of $1,000,000. As of December 31, 2000, the
outstanding principal balance on this loan totaled $2,000,000.

   During 1996, the Company converted its Preferred Stock to Common Stock and
the accrued Preferred Stock dividend due to an officer of the Company and a
related party of $581,542 and $472,545, respectively, was exchanged for notes
with interest payable at 10%. As of December 31, 2000, the outstanding principal
due an officer of the Company and a related party on these notes was $581,542
and $462,330, respectively. As of December 31, 1999, $581,542 and $462,330 was
outstanding.

   Included in notes payable to related parties is a note payable to Mission
Gorge, LLC which bear interest at 12%. Outstanding balances as of December 31,
2000 and 1999 was $2,000,000.


                                       15
<PAGE>

   Included in notes payable to related parties are notes payable to an officer
which bear interest at 12%. Outstanding balances as of December 31, 2000 and
1999 were $1,045,611 and $2,865,611, respectively.

   The Company has other loans from related parties, which provide for interest
at 10% and prime plus 1% (9,50% at December 31, 2000) per annum and in which
certain loans are due on demand. As of December 31, 2000 and 1999 these loans
totaled $740,000.

   As of December 31, 2000, the Company had eight remaining projects in various
stages of development. During 2000, the Company had seven producing revenues
from completed homes: Antares, Summertree Park, Creekside Estates, Parkland
Farms, Parc Metropolitan, High Ridge Court, and Saddlerock. As of December 31,
2000, the Antares and Summertree Park projects were completed and all homes were
closed in escrow. The remaining three projects, Montserrat Classics, McGuire
Luxury Apartments, and Parcwest Apartments are in the initial stages of
development. The Company enters 2001 with 341 homes under construction, of which
128 are sold, and 19 model units. Additionally, the Company has an inventory of
542 lots under development.

   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.


                                       16
<PAGE>

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

   The table below represents the contractual balances of our financial
instruments at the expected maturity dates as well as their fair value at
December 31, 2000. The expected maturity categories take into consideration
actual amortization of principal and does not take into consideration
reinvestment of cash. The weighted average interest rate for various liabilities
presented are actual as of December 31, 2000.

<TABLE>
<CAPTION>
                                                              Principal maturing in:                                  Fair value
                                          --------------------------------------------------------------              December 31,
                                             2001           2002     2003     2004     2005   Thereafter   Total          2000
                                          ========================================================================================
<S>                                       <C>               <C>      <C>      <C>      <C> <C>           <C>           <C>
Interest rate sensitive liabilities
Variable rate borrowings                  $62,983,574                                      $       --   $62,983,574    $62,983,574
   Average interest rate                       10.63%                                                         10.63%
Fixed rate borrowings                      23,060,157                                       1,000,000    24,060,157     24,060,157
   Average interest rate                       11.50%                                            6.35%        11.28%
                                          ----------------------------------------------------------------------------------------
                                          $86,043,731                                      $1,000,000   $87,043,731    $87,043,731
                                          ========================================================================================
Weighted average interest rate                 10.86%                                           6.35%         10.81%
                                          ========================================================================================
</TABLE>

   The table below represents the contractual balances of our financial
instruments at the expected maturity dates as well as their fair value at
December 31, 1999. The expected maturity categories take into consideration
actual amortization of principal and does not take into consideration
reinvestment of cash. The weighted average interest rate for various liabilities
presented are actual as of December 31, 1999.
<TABLE>
<CAPTION>

                                                           Principal maturing in:                                       Fair value
                                    -----------------------------------------------------------------
                                                                                                                       December 31,
                                        2000          2001        2002     2003    2004     Thereafter       Total         1999
                                    ================================================================================================
<S>                                   <C>              <C>        <C>      <C>     <C>     <C>             <C>           <C>
Interest rate sensitive liabilities
Variable rate borrowings              $40,011,138      $314,231                            $   --          $40,325,369   $40,325,369
   Average interest rate                    9.74%         9.50%                                                  9.74%
Fixed rate borrowings                  15,863,865    15,886,937                                1,000,000    32,750,802    32,750,802
   Average interest rate                   11.64%        10.58%                                    6.35%        10.96%
                                    ------------------------------------------------------------------------------------------------
                                      $55,875,003   $16,201,168                               $1,000,000   $73,076,171   $73,076,171
                                    ================================================================================================
Weighted average interest rate             10.28%        10.56%                                    6.35%        10.29%
                                    ================================================================================================

</TABLE>


                                       17
<PAGE>

Effects of inflation

   Real estate has long been considered a hedge against inflation, and inflation
has often contributed to dramatic growth in property values. During normal
markets, the Company has been able to pass increased costs of materials and
labor to its buyers by increasing its sales prices. However, growth in property
values slowed or reversed during 1996 and 1997 in California, thus preventing
the Company from increasing sales prices to cover increased costs. In 1998, 1999
and 2000, due to the strength and stability of the economy, the real estate
market has experienced increases in sales price and the number of home buyers.


                                       18
<PAGE>

ITEM 8. Financial Statements and Supplementary Data


Page No.    Financial Statements:
--------    ---------------------

    24      Independent Auditors' Report

    25      Consolidated Balance Sheets as of December 31, 2000 and 1999

    26      Consolidated Statements of Operations For Each of the Three Years
            Ended December 31, 2000

    27      Consolidated Statements of Stockholders' Equity For Each of the
            Three Years Ended December 31, 2000

    28      Consolidated Statements of Cash Flows For Each of the Three Years
            Ended December 31, 2000

    30      Notes to Consolidated Financial Statements

            FINANCIAL STATEMENT SCHEDULE:

    42      II - Valuation and Qualifying Accounts --Three Years Ended
            December 31, 2000

            Schedules other then listed above are omitted because they are not
            applicable, not required, or the information required to be set
            forth therein is included in the financial statements or the notes
            thereto.

ITEM 9. Disagreements on Accounting and Financial Disclosure

      None.


                                       19
<PAGE>

                                    PART III

   Items 10, 11, 12 and 13 are incorporated by reference from the Company's
definitive proxy statement to be filed within 120 days after the close of the
calendar year with the Commission, pursuant to Regulation 14A.

                                     PART IV

ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K


(a)   (1) and (2) For a listing of financial statements and schedules, reference
      is made to Item 8 included in this Form 10-K.

      (3) The Exhibits listed on the accompanying Index to Exhibits immediately
      following Schedule II are filed as part of this report. Exhibits 10.1
      through 10.4 are compensatory plans.

(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.

     A Current Report on Form 8-K dated November 14, 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
September 30, 2000, and under item 7(c) a press release announcing Calprop
Corporations' third quarter results.


                                       20
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) 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
----------------------------
(Registrant)

/s/ Victor Zaccaglin                            March 26, 2001
--------------------                           ---------------
Victor Zaccaglin,                                    Date
Chairman of the Board
  and Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

/s/ Mark F. Spiro                               March 26, 2001
--------------------                           ---------------
Mark F. Spiro                                        Date
Vice President/Secretary and
Treasurer (Chief Financial
and Accounting Officer)

/s/ Ronald S. Petch                             March 26, 2001
--------------------                           ---------------
Ronald S. Petch,                                     Date
President

/s/ E. James Murar                              March 26, 2001
--------------------                           ---------------
E. James Murar                                       Date
Director

/s/ Mark T. Duvall                              March 26, 2001
--------------------                           ---------------
Mark T. Duvall                                       Date
Director

/s/ John L. Curci                               March 26, 2001
--------------------                           ---------------
John L. Curci                                        Date
Director

/s/ Victor Zaccaglin                            March 26, 2001
--------------------                           ---------------
Victor Zaccaglin                                     Date
Chairman of the Board
Chief Executive Officer


                                       21
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
and Stockholders of Calprop Corporation:

     We have audited the accompanying consolidated balance sheets of Calprop
Corporation and subsidiaries (the "Company") as of December 31, 2000 and 1999,
and the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 2000.
Our audits also included the financial statement schedule listed in the Index at
Item 8. These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements and financial statement schedule based on
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Calprop Corporation and
subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States of America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.


DELOITTE & TOUCHE LLP

Los Angeles, California
March 26, 2001


                                       22
<PAGE>

                               CALPROP CORPORATION
                           CONSOLIDATED BALANCE SHEETS

Assets                                                       December 31,
                                                  ------------------------------
                                                            2000           1999
                                                  ------------------------------
REAL ESTATE UNDER DEVELOPMENT (Notes 3 and 5)        $98,544,447    $79,070,791
                                                  ------------------------------
OTHER ASSETS:
    Cash and cash equivalents                          2,394,310      1,405,663
    Deferred tax asset (Note 6)                        6,535,343      6,500,000
    Other assets (Note 4)                                863,412        841,189
                                                  ------------------------------
          Total other assets                           9,793,065      8,746,852
                                                  ------------------------------
                                                    $108,337,512    $87,817,643
                                                  ==============================
Liabilities and Stockholders' Equity

TRUST DEEDS AND NOTES PAYABLE (Note 5)               $66,341,488    $48,216,139
RELATED-PARTY NOTES (Note 5 )                         20,702,243     24,860,032
                                                  ------------------------------
     Total trust deeds, notes payable and             87,043,731     73,076,171
     related-party notes
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Note 5)      9,316,681      6,391,621
WARRANTY RESERVES                                        546,984        358,287
                                                  ------------------------------
     Total liabilities                                96,907,396     79,826,079
                                                  ------------------------------

MINORITY INTERESTS                                                      228,191
                                                  ------------------------------
COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' EQUITY (Note 8):

     Common stock, no par value; $1 stated
        value, 20,000,000 shares authorized;
        authorized, 10,290,535 and 10,293,735
        shares issued and outstanding at
        December 31, 2000 and 1999, respectively      10,290,535     10,293,735
     Additional paid-in capital                       25,849,961     25,849,961
     Deferred Compensation (Note 7)                    (105,525)      (170,327)
     Stock Purchase Loans (Note 7)                     (519,733)      (496,934)
     Accumulated deficit                            (24,085,122)   (27,713,062)
                                                  ------------------------------
          Total Equity                                11,430,116      7,763,373
                                                  ------------------------------
                                                    $108,337,512    $87,817,643
                                                  ==============================

                      See notes to consolidated financial statements


                                       23
<PAGE>

                               CALPROP CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                        Years Ended December 31,
                                               -----------------------------------------
                                                      2000       1999        1998
                                               -----------------------------------------
<S>                                            <C>            <C>            <C>
DEVELOPMENT OPERATIONS (Note 3):

     Real estate sales                         $64,238,615    $52,598,849    $33,071,722
     Cost of real estate sales (Note 5)         58,561,703     50,242,115     30,444,198
                                               -----------------------------------------
                                                 5,676,912      2,356,734      2,627,524
     Recognition of impairment of real estate
         under development (Note 3)                           (2,519,521)
                                               -----------------------------------------
        Income (loss) from development
        operations                               5,676,912      (162,787)      2,627,524

Other income                                       230,643       107,610          87,405

Other expenses:
    General and administrative                   2,637,496     2,309,225       1,752,909
    Interest expense (Note 5)                                     70,304         135,081
                                               -----------------------------------------
       Total other expenses                      2,637,496     2,379,529       1,887,990

Minority interests                               (216,393)         1,249         232,633
                                               -----------------------------------------

Income (loss) before benefit for income taxes    3,486,452    (2,435,955)        594,306
Benefit for income taxes (Note 6)                  141,488      1,683,373      4,773,700
                                               -----------------------------------------

NET INCOME (LOSS)                               $3,627,940     $(752,582)     $5,368,006
                                               =========================================

BASIC NET INCOME (LOSS) PER SHARE (Note 8)           $0.35        $(0.07)          $0.54
                                               =========================================
DILUTED NET INCOME (LOSS) PER SHARE (Note 8)         $0.35        $(0.07)          $0.52
                                               =========================================
</TABLE>

                 See notes to consolidated financial statements


                                       24
<PAGE>
                               CALPROP CORPORATION
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                      Common       Stock
                                  ------------------------------ Additional     Deferred       Stock                      Total
                                                                  Paid-In        Comp-       Purchase   Accumulated   Stockholders'
                                      Shares       Amount         Capital       ensation       Loans      Deficit        Equity
                                  -------------------------------------------------------------------------------------------------
<S>                                <C>         <C>             <C>            <C>          <C>          <C>             <C>
BALANCE,
January 1, 1998                    9,304,785   $  9,304,785    $ 25,886,906   $ (106,595)               $(32,328,486)   $ 2,756,610
     Net income                                                                                             5,368,006     5,368,006

     Net issuance of shares
         under 1989 stock
         incentive plan (Note 7)      98,100         98,100          64,725     (162,825)
     Issuance of shares
         upon option exercise        151,250        151,250         (25,827)                                                125,423
     Issuance of shares
         upon executive
         loans (Note 7)              730,000        730,000         (74,674)                $(455,938)                      199,388
     Accrual of interest under
         stock purchase loans                                                                 (18,196)                      (18,196)
   Amortization of deferred
         compensation (Note 7)                                                    28,290                                     28,290
                                  -------------------------------------------------------------------------------------------------

BALANCE,
December 31, 1998                 10,284,135     10,284,135      25,851,130     (241,130)    (474,134)   (26,960,480)     8,459,521
     Net loss                                                                                               (752,582)     (752,582)
   Cancellation of shares
         under 1989 stock
         incentive plan (Note 7)    (13,400)       (13,400)                        9,200                                    (4,200)
     Issuance of shares
         upon option exercise         23,000         23,000          (1,169)                                                 21,831
     Accrual of interest under
         stock purchase loans                                                                 (22,800)                     (22,800)
    Amortization of deferred
         compensation (Note 7)                                                    61,603                                     61,603
                                  -------------------------------------------------------------------------------------------------

BALANCE,
December 31, 1999                 10,293,735     10,293,735      25,849,961    (170,327)     (496,934)   (27,713,062)     7,763,373
     Net income                                                                                             3,627,940     3,627,940
   Cancellation of shares
         under 1989 stock
         incentive plan (Note 7)     (3,200)        (3,200)                       3,200
     Accrual of interest under
         stock purchase loans                                                                 (22,799)                     (22,799)
    Amortization of deferred
         compensation (Note 7)                                                    61,602                                     61,602
                                  -------------------------------------------------------------------------------------------------
BALANCE,
December 31, 2000                 10,290,535   $ 10,290,535    $ 25,849,961   $ (105,525)   $(519,733)  $(24,085,122)   $11,430,116
                                  =================================================================================================
</TABLE>

                 See notes to consolidated financial statements


                                       25
<PAGE>

                               CALPROP CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                      Years Ended December 31,
                                                                     -----------------------------------------------------
                                                                              2000                1999               1998
                                                                     -----------------------------------------------------
<S>                                                                  <C>                  <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income (loss)                                               $  3,627,940         $   (752,582)        $  5,368,006

     Adjustments to reconcile net income (loss) to net cash
     used in operating activities:
          Minority interests                                             (216,393)               1,249              232,633
          Amortization of deferred compensation                            61,602               61,603               28,290
          Depreciation and amortization                                    64,093               59,511               45,124
          Deferred income taxes                                           (35,343)          (1,700,000)          (4,800,000)
          Recognition of impairment of real estate
          under development                                             2,519,521
          Provision for warranty reserves                                 283,732              456,283              288,977
     Change in assets and liabilities
         (Increase) decrease in other assets                              (44,421)              34,284             (261,994)
         Increase in accounts payable and accrued liabilities           2,925,060            1,335,611            1,740,563
         Decrease  in warranty reserves                                   (95,035)            (382,619)            (292,631)
         Additions to real estate under development                   (78,035,359)         (66,550,230)         (69,400,417)
         Cost of real estate sales                                     58,561,703           50,242,115           30,444,198
         Accrued interest for executive stock purchase loans              (22,799)             (22,800)             (18,196)
                                                                     ------------------------------------------------------
               Net cash used in operating activities                  (12,925,220)         (14,698,054)         (36,625,447)
                                                                     ------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Capital expenditures                                                 (41,895)             (85,695)             (77,605)
                                                                     ------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Borrowings under related-party notes                               5,650,000           10,970,840           13,852,845
     Payments under related-party notes                                (9,807,789)          (6,981,094)          (5,701,388)
     Borrowings under trust deeds and notes payable                    80,797,103           59,300,047           57,750,061
     Payments under trust deeds and notes payable                     (62,671,754)         (48,608,415)         (26,939,363)
     Contributions from joint venture partners                                                                      770,558
     Distributions to joint venture partners                              (11,798)            (100,000)          (2,864,097)
     Proceeds from issuance of common stock                                                     17,631              324,811
                                                                     ------------------------------------------------------
          Net cash provided by financing activities                    13,955,762           14,599,009           37,193,427
                                                                     ------------------------------------------------------
     Net increase (decrease) in cash and cash equivalents                 988,647             (184,740)             490,375
     Cash and cash equivalents at beginning of the year                 1,405,663            1,590,403            1,100,028
                                                                     ------------------------------------------------------
     Cash and cash equivalents at end of the year                    $  2,394,310         $  1,405,663         $  1,590,403
                                                                     ======================================================
</TABLE>

                 See notes to consolidated financial statements


                                       26
<PAGE>

                               CALPROP CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                         Years Ended December 31,
                                                                               -----------------------------------------
                                                                                    2000           1999            1998
                                                                               -----------------------------------------
<S>                                                                              <C>            <C>            <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Cash paid (received) during the year for:
          Interest (net of amount capitalized)                                 $      --        $57,524        $135,081
          Income (refund) taxes                                                 (116,380)        21,727         $26,300

NON-CASH INVESTING AND FINANCING ACTIVITIES:
     Issuance of shares under 1989 stock incentive plan                                                         162,825
     Receipt of executive loans in exchange for issuance of shares                                              455,938
     Sale of the Victorville property                                                                         2,975,982
     Reduction of debt related to the sale of the Victorville property                                        2,975,982
     Acquisition of 50% interest in joint venture in exchange for cash and
       a note payable of $2,000,000                                                           2,000,000
</TABLE>

                 See notes to consolidated financial statements


                                       27
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

(1) Organization

      Nature of operations - Calprop Corporation ("the Company"), a California
      Corporation, constructs and sells single-family detached and attached
      homes and townhomes as part of condominiums or planned unit developments
      in California and Colorado. As of December 31, 2000, the Company had eight
      residential housing projects in various stages of development, consisting
      of 341 homes under construction (128 were in escrow), 542 lots under
      development, and 19 model homes used in selling the various types of
      housing developed. The Company's products range from homes for first-time
      buyers to custom homes.

      Basis of presentation - The accompanying financial statements include the
      accounts of Calprop Corporation and all its subsidiaries. All significant
      intercompany transactions and balances have been eliminated in
      consolidation. Such statements have been prepared in accordance with
      accounting principles generally accepted in the United States of America.

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

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                      Ownership interest at
                             Entity                     December 31, 2000              Development
---------------------------------------------------------------------------------------------------------------------------------

<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.

      Parkland: Pursuant to the operating agreement of Parkland, Calprop 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, Calprop 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, Calprop purchased all of RGC's ownership
      interest in RGCCLPO.

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


                                       28
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

(2)  Summary of Significant Accounting Policies

      Revenue and cost recognition - Revenue from real estate sales and related
      costs are recognized at the close of escrow, when title passes to the
      buyer. Cost of real estate sales is based upon the relative sales value of
      units sold to the estimated total sales value of the respective projects.

      The Company 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. During 1999, the Company
      recorded an impairment loss of $2,519,521 (Note 3).

      Cash and cash equivalents - The Company considers readily marketable
      securities with a maturity of 90 days or less at the date of purchase to
      be cash equivalents.

      Income taxes - Deferred income tax assets and liabilities are computed for
      differences between the financial statement and income tax bases of assets
      and liabilities. Such deferred income tax asset and liability computations
      are based on enacted tax laws and rates applicable to periods in which the
      differences are expected to reverse. A valuation allowance is established,
      when necessary, to reduce deferred income tax assets to the amount
      expected to be realized.

      Office equipment and other - Office equipment and other is stated at cost
      less accumulated depreciation. Equipment is depreciated utilizing the
      straight-line method over its estimated useful life of five years.

      Warranty reserves - The Company provides a one-year warranty to purchasers
      of single-family homes. The Company accrues estimated warranty costs on
      properties as they are sold. Estimated warranty costs are based on actual
      warranty costs.

      In addition to the Company's one-year warranty, California and Colorado
      law provides the Company's customers certain implied warranties, the scope
      and duration of which exceed the Company's express warranties. The Company
      requires its subcontractors to indemnify the Company in writing and
      requires the insurance of the subcontractor to provide that the Company is
      a primary insured on their insurance policy and an additional insured from
      its subcontractors for liabilities arising from their work, except for
      liability arising through the sole negligence or willful misconduct of the
      Company or from defects in designs furnished by the Company. Nevertheless,
      the Company is primarily liable to its customers for breach of warranty.
      The Company has builder's product liability insurance coverage which it
      believes to be adequate in light of the Company's claims history.

      Employee stock plans - The Company adheres to APB Opinion No. 25 to
      account for its stock-based compensation awards to employees and discloses
      the required pro forma effect on net income and earnings per share
      consistent with SFAS No. 123, "Accounting for Stock-Based Compensation."

      Use of estimates - The preparation of financial statements in conformity
      with accounting principles generally accepted in the United States of
      America requires management to make estimates and assumptions that affect
      the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements
      and the reported amounts of revenues and expenses during the reporting
      period. Actual results could differ from those estimates.

      Segment information - The Company is in one business segment, the
      residential housing industry, and as a result, substantially all of the
      assets of the Company are devoted to that segment and accordingly the
      Company does not provide additional segment disclosure.


                                       29
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

      Reclassifications - Certain prior year amounts have been reclassified to
      conform to the 2000 presentation.

      Fair value of financial instruments - Management believes the recorded
      value of notes payable to financial institutions approximate the fair
      market value as a result of variable interest rates and short-term
      durations. Management also believes that it is not practical to estimate
      the fair value of related-party notes.

      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 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 will not have a material impact on the Company's
      financial position or results of operations.

      In December 1999, the SEC issued Staff Accounting Bulletin No. 101,
      "Revenue Recognition in Financial Statements" ("SAB 101"). In June 2000,
      the SEC issued SAB 101B to defer the effective date for implementation of
      SAB 101 until the fourth quarter of fiscal 2000. SAB 101 summarizes
      certain of the SEC's views in applying accounting principles generally
      accepted in the United States of America to revenue recognition in
      financial statements. The adoption of SAB 101 did not have a material
      impact on the Company's financial position or results of operations.


                                       30
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

(3) Real Estate Under Development

      Real estate under development at December 31, 2000 and 1999 is summarized
      as follows:

<TABLE>
<CAPTION>
                                                         2000                            1999
                                                 -----------------------------------------------------------------
                                                         Amount       Units/Lots         Amount        Units/Lots
                                                 -----------------------------------------------------------------
<S>                                                   <C>                    <C>      <C>                     <C>
Single-family residences                              $28,208,788            100      $19,822,171             111
Townhomes                                              50,427,091            260       14,503,476              41
Apartments                                                210,502                         251,949
                                                 -----------------------------------------------------------------
Total single family residences                         78,846,381            360       34,577,596             152
Land under development                                 16,954,843            360       41,980,927             994
                                                 -----------------------------------------------------------------
Total real estate under development before
     investment in joint venture                       95,801,224            720       76,558,523           1,146
Investment in joint ventures                            2,743,223            182        2,512,268
                                                 -----------------------------------------------------------------
Total real estate under development                   $98,544,447            902      $79,070,791           1,146
                                                 =================================================================
</TABLE>

      Investment in joint ventures represents the Company's investment in
      Mission Gorge, LLC and RGC Carmel County Associates, LLC. In 1996, Mission
      Gorge, LLC, a California limited liability company, was formed and the
      Company transferred its Mission Gorge property to the joint venture. In
      connection with the formation, the Curci-Turner Company ("Curci"),
      exchanged a $2,000,000 note receivable from the Company for a 50%
      ownership interest in Mission Gorge, LLC. A principal of the Curci-Turner
      Company is a stockholder of the Company. In 1999, the Company formed RGC
      Carmel Country Associates, LLC, a California limited liability company,
      ("RGC Carmel") with RGC. The profits and losses of RGC Carmel are to be
      distributed between the members as follows, 50% to RGC and 50% to the
      Company. During 2000, RGC Carmel admitted additional members in the
      following proportions: The John L. Curci Trust as to a 12.5% interest, The
      Janet Curci Living Trust No. II as to a 12.5% interest, and an officer of
      the Company as to a 25% interest in exchange for financing for the project
      as follows: $2,000,000 in equity and $2,000,000 in notes payable. As a
      result, the Company's interest in RGC Carmel was reduced to 25%, which is
      accounted for under the equity method of accounting.


                                       31
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

Development operations in 2000, 1999 and 1998 are summarized as follows:

<TABLE>
<CAPTION>
                                                  2000                       1999                       1998
                                                --------------------------------------------------------------------------
REAL ESTATE SALES:                               Amount           Units     Amount          Units      Amount        Units
                                                --------------------------------------------------------------------------
<S>                                            <C>                  <C>    <C>                <C>     <C>             <C>
     Single-family residences                  $36,056,559          141    $52,598,849        226     $33,071,722     162
     Townhomes                                  28,182,056           78
                                                --------------------------------------------------------------------------
          Total Sales                           64,238,615          219     52,598,849        226      33,071,722     162

COST OF REAL ESTATE SALES:
     Single-family residences                   34,607,881                  49,576,788                 30,124,006
     Townhomes                                  23,665,837                     198,089                     31,215
     Apartments                                      4,253                      10,956
     Warranty                                      283,732                     456,282                    288,977
                                               -----------                 -----------                -----------
          Total Cost of Sales                   58,561,703                  50,242,115                 30,444,198

 Recognition of impairment of real estate
     under development                                                     (2,519,521)
                                               -----------                 -----------                -----------

Income (loss) from development operations       $5,676,912                  $(162,787)                 $2,627,524
                                               ===========                ============                ===========
</TABLE>

      During 1999, the Company recorded an impairment loss on its Summertree
      Park, Elk Grove project of $2,519,521. The impairment loss on the
      Summertree Park, Elk Grove project was primarily a result of a slower
      absorption caused by a sagging real estate market in the Sacramento area
      since the inception of the project. 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.

(4) Other Assets

      Other assets at December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                             Interest Rate       Outstanding  Balance
                                                             --------------  ----------------------------
                                                                                  2000             1999
                                                                                -------------------------
<S>                                                           <C>                <C>            <C>
Trust deeds receivable                                        10%-12%            $55,859        $118,853
Less reserve                                                                    (30,000)        (50,000)
                                                                                -------------------------
Net trust deeds receivable                                                        25,859          68,853
Related-party receivable                                                          70,000          70,000
Deposits in escrow                                                                 1,000           1,000
Office equipment and other, net of accumulated depreciation
of $246,916 and $182,823 as of December 31, 2000 and 1999,
respectively                                                                     690,600         617,117
Prepaid expenses                                                                  75,953          84,219
                                                                                -------------------------
Other assets                                                                    $863,412        $841,189
                                                                                =========================
</TABLE>

                                       32
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

(5) Trust Deeds, Notes Payable and Related-Party Notes

      Trust deeds, notes payable and related party notes as of December 31, 2000
      and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                                                 Balance
                                                                                      -------------------------------
                                                                                          2000               1999
                                                                                      -------------------------------
<S>                                                                                    <C>               <C>
Trust Deeds and Notes Payable:

Notes payable to financial institutions, secured by development projects' trust
deeds - variable interest rates ranging from 6.25% to prime + 2.0%, (9.50% at
December 31, 2000); maturing January 2001 through July 2029                            $66,341,488       $48,216,139
                                                                                      ===============================
Related-Party Notes:

Notes payable to related parties, secured by development projects' trust deeds -
interest rates of 12%; maturing on demand through December 2001                        $13,719,075       $16,606,299

Notes payable to related parties, unsecured - interest rates of 10% and 12%;
maturing on demand through January 2002                                                  6,983,168         8,253,733
                                                                                      -------------------------------
Total related party notes                                                               20,702,243        24,860,032
                                                                                      -------------------------------
Total trust deeds and related party notes                                              $87,043,731       $73,076,171
                                                                                      ===============================
</TABLE>

      As of December 31, 2000, the Company had remaining loan commitments from
      banks and financial institutions of approximately $40,746,000 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.

      Related-Party Notes - The Company has the following notes payable to Curci
      at December 31, 2000 and 1999. Under the terms of certain of the notes
      payable, Curci receives interest and participates in "Net Proceeds" from
      certain projects, as defined in the loan agreement, which is comparable to
      net profit:

                                                  December 31,     December 31,
             Project               Profit share       2000             1999
      -------------------------   -------------- ------------     ------------
      Summertree Park                   40%      $        --         $860,150
      Parkland Farms                    50%               --        2,999,888
      High Ridge Court                  50%        3,084,491        2,196,261
      Saddlerock                        50%        2,600,000        2,350,000
      Mockingbird Canyon                50%        2,608,912        2,750,000
      Montserrat Classics               50%        3,450,000        3,450,000
                                                 ------------     ------------
                                                  11,743,403       14,606,299
                                                 ------------     ------------
      Other:
        Unsecured loans                            2,129,357        1,604,250
                                                 ------------     ------------
            Total - Curci                        $13,872,760      $16,210,549
                                                 ============     ===========


                                       33
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

      During the years ended December 31, 2000, 1999, and 1998, net
      participation proceeds expensed to cost of real estate sales in the
      accompanying consolidated statements of operations were $514,105,
      $391,960, and $0, respectively. Accrued participation proceeds included in
      accounts payable and accrued liabilities in the accompanying consolidated
      balance sheets at December 31, 2000 and 1999 was $906,065 and $391,960,
      respectively.

      Other Related Parties

      During 1999, the Company purchased RGC's fifty percent ownership in
      RGCCLPO. Consideration for the purchase consisted of issuance of a note
      payable for $2,000,000 and payment of cash of $1,000,000. As of December
      31, 2000, the outstanding principal balance on this loan totaled
      $2,000,000. The note matures on December 20, 2001.

      During 1996, the Company converted its Preferred Stock to Common Stock and
      the accrued Preferred Stock dividend due to an officer of the Company and
      a related party of $581,542 and $472,545, respectively, was exchanged for
      notes with interest payable at 10%. As of December 31, 2000, the
      outstanding principal due on these notes was $581,542 and $462,330,
      respectively. As of December 31, 1999, $581,542 and $462,330 was
      outstanding. The notes mature on December 31, 2001.

      Included in notes payable to related parties is a note payable to Mission
      Gorge, LLC which bears interest at 12%. The outstanding balance as of
      December 31, 2000 and 1999 was $2,000,000. The note matures on December
      31, 2001.

      Included in notes payable to related parties are notes payable to an
      officer which bear interest at 12%. Outstanding balances as of December
      31, 2000 and 1999 were $1,045,611 and $2,865,611, respectively. The notes
      mature on demand through December 31, 2001.

      As of December 31, 2000, the Company had loans, which bear for interest at
      10% and prime plus 1% (9.50% at December 31, 2000) and in which certain
      loans are due on demand from related parties. The remaining notes mature
      on September 1, 2001. As of December 31, 2000 and 1999, these loans
      totaled $740,000.


      Aggregate future principal payments due on trust deeds payable, notes
      payable and related party notes are as follows:

                        Years Ended
                        December 31
                        ---------------------------------------
                        2001                       $86,043,731
                        Thereafter                   1,000,000
                        ---------------------------------------
                        Total                      $87,043,731
                        =======================================

      During 2000, 1999 and 1998, the Company paid interest of $2,432,635,
      $2,124,618 and $1,446,132, respectively, on loans from related parties.
      The Company capitalized interest of approximately $2,412,029, $2,067,094
      and $1,311,051 for 2000, 1999 and 1998, respectively.


                                       34
<PAGE>


                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

(6)   Income Taxes

      The benefit for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                                     -----------------------------------------------------
                                          2000               1999                 1998
                                     -----------------------------------------------------
<S>                                   <C>               <C>                   <C>
   Current income tax expense            $35,343             $16,627               $26,300

   Net deferred income tax benefit      (35,343)         (1,700,000)           (4,800,000)

   Income tax refund                   (141,488)
                                     -----------------------------------------------------
                                      $(141,488)        $(1,683,373)          $(4,773,700)
                                     =====================================================
</TABLE>

      During the years ended December 31, 2000, 1999 and 1998, the Company
      reduced the deferred tax valuation allowance to recognize a deferred
      income tax benefit of $35,343, $1,700,000 and $4,800,000, respectively.
      The deferred tax benefit is based upon expected utilization of net
      operating loss carryforwards. The Company has assessed its past earnings
      history and trends, sales backlog, budgeted sales, and expiration dates of
      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 December 31, 2000, the Corporation had net operating loss
      carryforwards for federal and state income tax purposes of approximately
      $20,650,000 and $3,900,000, respectively. For federal and state tax
      purposes the net operating loss carryforwards expire from 2007 through
      2013, and from 2001 through 2003, respectively.

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


                                       35
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

      The deferred income tax assets, resulting from differences between
      accounting for financial statements purposes and tax purposes, less
      valuation allowance, are as follows:

                                              2000                    1999
                                       ---------------------------------------

Inventory reserves                           $214,000              $1,128,000
Warranty reserves and others                  500,000                 218,000
State net operating loss                      235,000                 376,000
Federal net operating loss                  7,020,000               7,768,000
                                       ---------------------------------------
                                            7,969,000               9,490,000
Valuation allowance                       (1,433,657)             (2,990,000)
                                       ---------------------------------------
                                           $6,535,343              $6,500,000
                                       =======================================

The following is a reconciliation of the federal statutory rate to the Company's
effective rate for 2000, 1999, and 1998:

<TABLE>
<CAPTION>
                                                        2000                          1999                          1998
                                            ----------------------------------------------------------------------------------------
                                                 Amount     Percentage          Amount     Percentage          Amount     Percentage
                                            ----------------------------------------------------------------------------------------
<S>                                          <C>                   <C>      <C>                 <C>          <C>                 <C>
Statutory rate                               $1,185,394            34%      $(828,225)          (34)%        $202,064            34%

State franchise tax, net of federal
tax benefit                                     208,884             6%          16,627            .7%          26,300           4.4%

Change in valuation allowance               (1,538,994)        (44.1%)       (871,775)        (35.8%)     (5,002,064)       (841.6%)

Other                                             3,228            .1%
                                            ----------------------------------------------------------------------------------------
                                             $(141,488)           (4%)    $(1,683,373)        (69.1%)    $(4,773,700)       (803.2%)
                                            ========================================================================================
</TABLE>


(7)   Qualified and Non-Qualified Stock Option Plans

      The Company has three stock-based compensation plans, which are described
      below. The Company applies APB Opinion 25 and related Interpretations in
      accounting for its stock-based compensation. Accordingly, no compensation
      costs have been recognized for its fixed stock option plans during 2000,
      1999, and 1998. The compensation cost that has been charged against income
      for its stock incentive plan was $61,602 in 2000, $61,203 in 1999 and
      $28,290 in 1998. Had compensation costs for the Company's stock-based
      compensation plans been determined based on the fair value at the grant
      dates for awards under those plans consistent with SFAS No. 123, the
      Company's net income (loss) and income (loss) per share would have been
      adjusted to the pro forma amounts indicated below:

<TABLE>
<CAPTION>

                                                                2000                   1999                     1998
                                                                ----                   ----                     ----
      <S>                                 <C>                 <C>                  <C>                        <C>
      Net income (loss) to
          common shareholders:            As reported         $3,627,940             $(752,582)               $5,368,006
                                          Pro forma           $3,505,121           $(1,047,863)               $5,079,334

      Diluted income (loss) per share:    As reported               $.35                $(0.07)                    $0.52
                                          Pro forma                 $.34                $(0.10)                    $0.49
</TABLE>


                                       36
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

      The 1983 Stock Option Plan authorized an aggregate of 653,006 (adjusted
      for stock dividends) shares of common stock to be reserved for grant. The
      1983 Stock Option Plan expired in September, 1993. Changes in the 1983
      Stock Option Plan are summarized as follows:

<TABLE>
<CAPTION>
                                                     2000                      1999                    1998
                                             -------------------     --------------------------  -------------------
                                                        Weighted                       Weighted            Weighted
                                                         Average                        Average             Average
                                                        Exercise                       Exercise            Exercise
                                             Shares       Price      Shares              Price   Shares      Price
                                             -------------------     --------------------------  -------------------
<S>                                            <C>        <C>       <C>       <C>        <C>      <C>         <C>
Outstanding, beginning of year                 58,000     $2.93               59,000     $2.92    149,500     $1.69
Granted

Exercised                                                                       (500)    $2.50   (90,000)     $0.88

Canceled                                                                        (500)    $2.50      (500)     $2.50
                                             -------------------     --------------------------  -------------------
Outstanding, end of year                       58,000     $2.93               58,000     $2.93     59,000     $2.92
                                             ===================     ==========================  ===================
Exercisable, end of year                       48,000                         48,500               44,000
                                             ==========              ================            =========
</TABLE>

      The 1993 Stock Option Plan, (amended by the shareholders May 20, 1999)
      authorizes an aggregate of 2,000,000 shares of the Company's common stock
      to be reserved for grant. The options fully vest a year from the date of
      grant. Changes in the 1993 Stock Option plan are summarized as follows:

<TABLE>
<CAPTION>
                                                     2000                      1999                    1998
                                             -------------------     --------------------------  -------------------
                                                        Weighted                       Weighted            Weighted
                                                         Average                        Average             Average
                                                        Exercise                       Exercise            Exercise
                                             Shares       Price      Shares              Price   Shares      Price
                                             -------------------     --------------------------  -------------------
<S>                                            <C>        <C>                 <C>        <C>      <C>         <C>
Outstanding, beginning of year                866,800     $1.27              634,000     $1.14  1,137,000     $0.85
Granted                                                                      260,350     $1.56    274,900     $1.63
Exercised                                                                   (18,300)     $0.90  (766,250)     $0.89
Canceled                                      (6,100)     $1.55              (9,250)     $1.48   (11,650)     $0.77
                                             -------------------     --------------------------  -------------------
Outstanding, end of year                      860,700     $1.27              866,800     $1.27    634,000     $1.14
                                             ===================     ==========================  ===================
Exercisable, end of year                      860,700                        607,950              384,100
                                             ==========              ================            =========
Available for grant, end of year              328,250                        320,650               83,250
                                             ==========              ================            =========
</TABLE>

      The following table summarizes information about the outstanding options
      at December 31, 2000, from the Company's 1983 and 1993 stock option plans:

<TABLE>
<CAPTION>
                                       Options Outstanding                                          Options Exercisable
                -----------------------------------------------------------------------    -------------------------------------
                                         Weighted-Average                                       Number
   Range of     Number Outstanding          Remaining             Weighted-Average           Exercisable       Weighted Average
Exercise Prices     at 12/31/00         Contractual Life           Exercise Price            at 12/31/00         Exercise Price
---------------  -----------------------------------------------------------------------    ------------------------------------
<S>                  <C>                    <C>                          <C>                       <C>                  <C>
$0.69 to $0.96       298,000                4.8 years                    $0.72                     298,000              $0.72
$1.00 to $1.88       562,700                8.1 years                    $1.56                     562,700              $1.56
$2.50 to $3.00        58,000                1.0 years                    $2.93                      48,000              $2.92
                -----------------------------------------------------------------------    -------------------------------------
$0.69 to $3.00       918,700                6.6 years                    $1.37                     908,700              $1.35
                ================================================================================================================
</TABLE>


                                       37
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

      The 1989 Executive Long-Term Stock Incentive Plan , (amended by the
      shareholders May 23, 1996) authorizes an aggregate of 500,000 (adjusted
      for stock dividends) shares of the Company's common stock to be reserved
      for awards to key employees of the Company. The stock, once granted to the
      key employees, vests at 20 percent a year from the date of grant. The
      non-vested shares represent unearned compensation. The 1989 Executive
      Long-Term Incentive Plan expired in May, 1999. Changes in the 1989
      Executive Long-Term Stock Incentive plan are summarized as follows:

<TABLE>
<CAPTION>

                                                                2000             1999              1998
                                                            --------------------------------------------
<S>                                                          <C>              <C>               <C>
Issued shares, beginning of year                             422,280          435,680           337,580

Issued                                                                                          103,500

Shares cancelled/returned at termination of employment       (3,200)         (13,400)           (5,400)
                                                            --------------------------------------------
Issued shares, end of year                                   419,080          422,280           435,680
                                                            ============================================
Vested, end of year                                          335,180          287,080           229,180
                                                            ============================================
Available for award, end of year                                  --               --            65,320
                                                            ============================================
</TABLE>

      Included as a separate deduction of stockholder's equity is deferred
      compensation relating to this plan of $105,525 and $170,327 as of December
      31, 2000, and 1999, respectively.

      The 1992 Director Stock Option Plan authorizes an aggregate amount of
      100,000 shares to be granted. Each year, the directors that are members of
      the stock option committee are granted options to buy 7,500 shares at the
      market price at the date of grant, exercisable one year after grant, and
      expire 10 years after the grant date. During 2000, 1999, and 1998, 15,000
      shares, 15,000 shares and 15,000 shares, respectively, were granted under
      this plan at an exercise prices of $1.27, $1.63, and $1.13 per share,
      respectively. The exercise prices represent the market price at the date
      of grant. At December 31, 2000, 15,000 shares were outstanding related to
      this plan. In 1996, the Company issued warrants to purchase 150,000 shares
      of common stock. As of December 31, 2000, 150,000 warrants were
      outstanding.

      The weighted-average fair value of the options granted during 2000, 1999
      and 1998 is $0.61, $0.98 and $1.20, respectively. The fair value of each
      option was estimated on the date of grant using the Black-Scholes
      option-pricing model with the following weighted-average assumptions for
      2000, 1999 and 1998, respectively: risk-free interest rates of 6.5 percent
      for all years; dividend yield of zero percent for all years; expected
      lives of 5.0, 9.7, and 9.7 years; and volatility of 44, 28, and 61
      percent.

      For the year ended December 31, 1999, options were not included in the
      computation of diluted net loss per common share because the effect would
      be antidilutive to the net loss in the period. However, for the years
      ended December 31, 2000 and 1998, 579,700 and 328,900 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.

      On March 10, 1998, three officers and a director of the Company exercised
      options to purchase a total of 720,000 shares of common stock with a
      weighted-average exercise price of $0.8989 per share. The Company received
      $199,395 cash from an officer and received $447,813 in notes receivable
      from the remaining two officers and the director as a result of the
      exercise of these options. The notes receivable accrue interest at 4.987%
      and mature on March 10, 2001 and are guaranteed by the officers. The
      notes' maturity dates have been extended to March 10, 2004.

      On October 15, 1998, one officer of the Company exercised options to
      purchase a total of 10,000 shares of common stock with a weighted-average
      exercise price of $0.8125 per share. The Company received a note
      receivable for $8,125 from the officer as a result of the exercise of
      these options. The note receivable accrues interest at 4.987% and matures
      on October 15, 2001 and is guaranteed by the officer.

      As of December 31, 2000 and 1999, accrued interest for the stock purchase
      loans was $63,796 and $40,996, respectively.


                                       38
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

(8)   Earnings Per Share

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

<TABLE>
<CAPTION>
                                                       2000                 1999              1998
                                                   ---------------------------------------------------
<S>                                                  <C>                  <C>              <C>
Numerator:
     Net income (loss)                               $3,627,940          $  (752,582)      $5,368,006
                                                   ---------------------------------------------------
     Numerator for basic and diluted net income
     (loss) per share                                 3,627,940             (752,582)       5,368,006
                                                   ===================================================

Denominator for basic net income (loss) per share    10,290,816           10,289,852       10,005,565
     Effect of dilutive stock options                   170,753                               275,730
                                                   --------------------------------------------------
Denominator for dilutive net income (loss)
     per share (weighted average outstanding shares) 10,461,569           10,289,852       10,281,295
                                                    =================================================
Basic net income (loss) per share                         $0.35               $(0.07)           $0.54
                                                    =================================================
Diluted net income per share                              $0.35               $(0.07)           $0.52
                                                    =================================================
</TABLE>

(9)   Commitments and Contingencies

      Legal - There are several legal actions and claims pending against the
      Company. Based on the advice of legal counsel, management believes that
      the ultimate liability, if any, which may result from any of these
      lawsuits will not materially affect the financial position or results of
      operations of the Company.

      Employee benefit plan - The Company has a 401(k) plan (the "Plan"), which
      allows eligible employees to contribute from 1 percent to 15 percent of
      their annual compensation, not to exceed statutory limits. Company
      matching is at management's discretion. Currently, the Company matches 100
      percent of the first 6 percent of base compensation that participants
      contribute any plan year. The Company's contribution to the Plan for the
      years ended December 31, 2000, 1999, and 1998 was $116,312, $123,924, and
      $0, respectively.

      Leases - The Company has operating leases that expire through 2005. Future
      minimum rent as of December 31, 2000, is $170,758 in 2001, $95,902 in
      2002, $84,931 in 2003, $68,851 in 2004, $11,531 in 2005, and $0
      thereafter, for a total of $431,973. Rent expense for the years ended
      December 31, 2000, 1999 and 1998 was $188,711, $159,431, and $137,854,
      respectively.

(10)  Quarterly Financial Data - (unaudited)

      Year Ended December 31, 2000

<TABLE>
<CAPTION>
                                                       First                 Second                 Third                 Fourth
                                                 ----------------------------------------------------------------------------------
<S>                                                 <C>                   <C>                   <C>                    <C>
Sales                                               $7,583,363            $10,214,099           $16,525,836            $29,915,317
                                                 ==================================================================================
(Loss) income from development operations           $(322,839)               $813,142            $1,760,022             $3,426,587
                                                 ==================================================================================
Net (loss) income                                   $(573,085)               $194,656              $897,640             $3,108,729
                                                 ==================================================================================
Basic (loss) income per share                          $(0.06)                  $0.02                 $0.09                  $0.30
                                                 ==================================================================================
Diluted income per share                               $(0.06)                  $0.02                 $0.09                  $0.30
                                                 ==================================================================================
</TABLE>


                                       39
<PAGE>

                               CALPROP CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

      Year Ended December 31, 1999

<TABLE>
<CAPTION>
                                                       First                 Second                 Third                 Fourth
                                                 ----------------------------------------------------------------------------------
<S>                                                 <C>                   <C>                   <C>                    <C>
Sales                                               $7,782,859            $18,381,700           $15,730,888            $10,703,402
                                                 ==================================================================================
Income (loss) from development operations             $736,453               $511,209          $(1,889,442)               $478,993
                                                 ==================================================================================
Net income (loss)                                     $328,193                $74,834              $927,006           $(2,082,615)
                                                 ==================================================================================
Basic income (loss) per share                            $0.03                  $0.01                 $0.09                $(0.20)
                                                 ==================================================================================
Diluted income per share                                 $0.03                  $0.01                 $0.09                $(0.20)
                                                 ==================================================================================
</TABLE>


                                       40
<PAGE>

                               CALPROP CORPORATION
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                   For the three years ended December 31, 2000

                                                                     Trust Deeds
                                                 Warranty             Receivable
                                                 Reserve               Reserve
                                              ---------------------------------
Balance January 1, 1998                          $288,278              $50,000

     Additions charged to operations              288,977                  --

     Reductions                                 (292,631)                  --
                                              ---------------------------------
Balance December 31, 1998                         284,624               50,000

     Additions charged to operations              456,282                  --

     Reductions                                 (382,619)                  --
                                              ---------------------------------
Balance December 31, 1999                         358,287               50,000

     Additions charged to operations              283,732                  --

     Reductions                                  (95,035)              (20,000)
                                              ---------------------------------
Balance December 31, 2000                        $546,984              $30,000
                                              =================================


                                       41
<PAGE>

                                Index to Exhibits


3.1   Articles of Incorporation of the Company (Incorporated by reference to
      Exhibit 3.1 to the Company's Amendment No. 1 to Form S-1 filed with
      Securities Exchange Commission on July 3, 1994 bearing File #33-62516.)

3.2   By-laws of the Company (Incorporated by reference to Exhibit 3.2 to the
      Company's Amendment No. 1 to Form S-1 filed with Securities Exchange
      Commission on July 3, 1994 bearing File #33-62516.)

10.1  1983 Calprop Corporation Stock Option Plan (Incorporated by reference to
      the Company's Form S-8 Registration Statement (File No. 2-86872), which
      became effective September 30, 1983.)

10.2  1989 Executive Long-Term Stock Incentive Option Plan (Incorporated by
      reference to the Company's Form S-8 Registration Statement (File No.
      33-33640), which became effective March 18, 1991.)

10.3  1992 Directors Stock Option Plan (Incorporated by reference to the
      Company's Form S-8 Registration Statement (File No. 33-57226), which
      became effective January 18, 1993.)

10.4  1993 Calprop Corporation Stock Option Plan (Incorporated by reference to
      Exhibit 10.3 to the Company's Amendment No. 1 to Form S-1 filed with
      Securities Exchange Commission on July 3, 1993 bearing File #33-62516.)

23    Independent Auditors' Consent

27    Financial Data Schedule


                                       42
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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
----------------------------
(Registrant)


                                                               March 26, 2001
                                                            --------------------
-----------------------------                                       Date
Victor Zaccaglin,
Chairman of the Board
  and Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


                                                               March 26, 2001
-----------------------------                               --------------------
Mark F. Spiro                                                       Date
Vice President/Secretary and
Treasurer (Chief Financial
and Accounting Officer)

                                                               March 26, 2001
-----------------------------                               --------------------
Ronald S. Petch                                                     Date
President


                                                               March 26, 2001
-----------------------------                               --------------------
E. James Murar                                                      Date
Director


                                                               March 26, 2001
-----------------------------                               --------------------
Mark T. Duvall                                                      Date
Director


                                                               March 26, 2001
-----------------------------                               --------------------
John L. Curci                                                       Date
Director


                                                               March 26, 2001
-----------------------------                               --------------------
Victor Zaccaglin                                                    Date
Chairman of the Board
Chief Executive Officer