<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                                      FORM 10-Q
                            ------------------------------



                 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended September 30, 1998

                [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934

                          Commission file number  0-19891  

                                 SCHULER HOMES, INC.
                (Exact name of registrant as specified in its charter)

                      Delaware                               99-0293125
           (State or jurisdiction of                    (I.R.S. employer
       incorporation or organization)                   identification no.)

                           828 Fort Street Mall, Suite 400
                             Honolulu, Hawaii  96813-4321
                 (Address of principal executive offices) (Zip code)

                                    (808) 521-5661
                 (Registrant's telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

          YES   X                              NO
              ----                               ----

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

<TABLE>
<CAPTION>
                                               Outstanding at
        Class of Common Stock                 October 31, 1998
        ---------------------                 ----------------
        <S>                                   <C>
          $.01 par value                          20,118,465

</TABLE>

------------------------------------------------------------------------------

<PAGE>




                                SCHULER HOMES, INC.

                                       INDEX

PART I.   FINANCIAL INFORMATION


<TABLE>
<CAPTION>
<S>                                                                        <C>
Item 1.   Financial Statements

          Independent Accountants' Review Report . . . . . . . . . . . . .   3

          Consolidated Balance Sheets - September 30, 1998 and
             December 31, 1997 . . . . . . . . . . . . . . . . . . . . . .   4
          
          Consolidated Statements of Income - Three and nine months
             ended September 30, 1998 and 1997 . . . . . . . . . . . . . .   5

          Consolidated Statements of Cash Flows - Nine months
             ended September 30, 1998 and 1997 . . . . . . . . . . . . . .   6

          Notes to Consolidated Financial Statements . . . . . . . . . . .   7

Item 2.   Management's Discussion and Analysis of
             Financial Condition and Results of Operations . . . . . . . .  10

PART II.  OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .  18

SIGNATURES   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

</TABLE>



<PAGE>


                       INDEPENDENT ACCOUNTANTS' REVIEW REPORT


The Board of Directors and Stockholders
Schuler Homes, Inc.

We have reviewed the accompanying interim consolidated balance sheet of Schuler
Homes, Inc. as of September 30, 1998, and the related consolidated statements of
income for the three-month and nine-month periods ended September 30, 1998 and
1997, and the consolidated statements of cash flows for the nine-month periods
ended September 30, 1998 and 1997.  These financial statements are the
responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters.  It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole.  Accordingly, we do not
express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying interim consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.  See Note 1.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Schuler Homes, Inc. as of December
31, 1997, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the year then ended (not presented herein) and in our
report dated March 5, 1998, we expressed an unqualified opinion on those
consolidated financial statements.  In our opinion, the information set forth in
the accompanying consolidated balance sheet as of December 31, 1997, is fairly
stated, in all material respects, in relation to the consolidated balance sheet
from which it has been derived.


                                       ERNST & YOUNG LLP


Honolulu, Hawaii
November 9, 1998


                                       3
<PAGE>


                                 SCHULER HOMES, INC.
                             CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                              September 30, 1998       December 31, 1997
                                                                              ------------------       -----------------
                                                                                 (unaudited)
<S>                                                                           <C>                      <C>
ASSETS

Cash and cash equivalents (restricted-Note 2). . . . . . . . . . . . .           $    5,011,000            $   3,842,000
Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                1,267,000                  880,000
Prepaid income taxes . . . . . . . . . . . . . . . . . . . . . . . . .                1,434,000                1,682,000
Real estate inventories (Note 3) . . . . . . . . . . . . . . . . . . .              318,269,000              291,081,000
Investments in and advances to unconsolidated joint ventures . . . . .               20,129,000               16,026,000
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                2,265,000                1,691,000
Deferred offering costs, net (Note 9). . . . . . . . . . . . . . . . .                2,062,000                1,171,000
Notes receivable (Note 2). . . . . . . . . . . . . . . . . . . . . . .                2,175,000                2,406,000
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . .                4,085,000                4,002,000
Intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . . . .               13,200,000               13,742,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                4,059,000                4,048,000
                                                                                 --------------            -------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           $  373,956,000            $ 340,571,000
                                                                                 --------------            -------------
                                                                                 --------------            -------------

LIABILITIES AND STOCKHOLDERS= EQUITY

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .           $   14,744,000            $  12,805,000
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .               16,448,000               13,207,000
Notes payable to bank (Note 4) . . . . . . . . . . . . . . . . . . . .               10,993,000               91,077,000
Notes payable to others. . . . . . . . . . . . . . . . . . . . . . . .                3,907,000                2,627,000
6-1/2% convertible subordinated debentures due 2003. . . . . . . . . .               57,500,000               57,500,000
9% senior notes due 2008 (Note 9). . . . . . . . . . . . . . . . . . .               98,472,000                       --
                                                                                 --------------            -------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . .              202,064,000              177,216,000

Commitments and contingencies (Notes 4 and 8)

Stockholders' equity:
  Common stock, $.01 par value; 30,000,000 shares authorized; 
    20,892,465 and 20,874,927 shares issued at September 30, 1998 and 
    December 31, 1997, respectively. . . . . . . . . . . . . . . . . .                  209,000                  209,000
  Additional paid-in capital . . . . . . . . . . . . . . . . . . . . .               93,201,000               93,100,000
  Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . .               83,482,000               75,046,000
  Treasury stock, at cost; 774,000 shares at September 30, 1998
     and December 31, 1997 . . . . . . . . . . . . . . . . . . . . . .               (5,000,000)              (5,000,000)
                                                                                 --------------            -------------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . .              171,892,000              163,355,000
                                                                                 --------------            -------------
Total liabilities and stockholders' equity . . . . . . . . . . . . . .           $  373,956,000            $ 340,571,000
                                                                                 --------------            -------------
                                                                                 --------------            -------------
</TABLE>

                              See accompanying notes.


                                       4
<PAGE>


                                 SCHULER HOMES, INC.
                          CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>


                                                   Three months ended September 30,          Nine months ended September 30,
                                                   --------------------------------          -------------------------------
                                                        1998                1997                   1998              1997
                                                        ----                ----                   ----              ----
                                                               (unaudited)                                (unaudited)

<S>                                                <C>                 <C>                   <C>                <C>
Residential real estate sales. . . . . . . .        $  79,186,000       $  61,057,000        $ 202,131,000      $  163,509,000


Costs and expenses:
  Residential real estate sales. . . . . . .           63,206,000         48,683,000           161,064,000         132,168,000
  Selling and commissions. . . . . . . . . .            5,180,000          4,731,000            13,772,000          12,497,000
  General and administrative . . . . . . . .            4,165,000          3,898,000            11,685,000          10,197,000
                                                    --------------      --------------       --------------      -------------
    Total costs and expenses . . . . . . . .           72,551,000          57,312,000          186,521,000         154,862,000

Income from unconsolidated joint ventures. .              750,000             176,000            1,546,000             192,000
                                                   --------------       -------------        -------------      --------------
  Operating income . . . . . . . . . . . . .            7,385,000           3,921,000           17,156,000           8,839,000

Other income (expense) (Note 4). . . . . . .           (1,618,000)         (1,088,000)          (3,492,000)         (2,885,000)
                                                   --------------       -------------        -------------      --------------

  Income before provision for income taxes .            5,767,000           2,833,000           13,664,000           5,954,000
Provision for income taxes (Note 6). . . . .            2,184,000           1,075,000            5,228,000           2,260,000
                                                   --------------       -------------        -------------      --------------
  Net income . . . . . . . . . . . . . . . .       $    3,583,000       $   1,758,000           $8,436,000      $    3,694,000
                                                   --------------       -------------        -------------      --------------
                                                   --------------       -------------        -------------      --------------

Net income per share (Note 7):
  Basic and diluted . . . . . . . . . . . .                $0.18               $0.09                 $0.42               $0.18
                                                   --------------       -------------        -------------      --------------
                                                   --------------       -------------        -------------      --------------
</TABLE>

                              See accompanying notes.


                                       5
<PAGE>


                                 SCHULER HOMES, INC.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS




<TABLE>
<CAPTION>

                                                                                       Nine months ended September 30,
                                                                                       -------------------------------
                                                                                            1998              1997
                                                                                       ---------------     -----------
                                                                                                    (unaudited)
<S>                                                                                     <C>                 <C>
OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        $  8,436,000        $  3,694,000
Adjustments to reconcile net income to net cash provided by (used in)
  operating activities:
  Depreciation and amortization expense. . . . . . . . . . . . . . . . . . . . .           2,387,000           1,998,000
  Increase in allowance for doubtful accounts. . . . . . . . . . . . . . . . . .              96,000                  --
  (Income) loss from unconsolidated joint ventures . . . . . . . . . . . . . . .          (1,463,000)            (26,000)
  Principal payments of notes receivable . . . . . . . . . . . . . . . . . . . .             150,000           1,591,000

Changes in assets and liabilities, net of effects from purchase of Melody
  Homes and Mortgage:
    (Increase) decrease in receivables . . . . . . . . . . . . . . . . . . . . .            (387,000)            635,000
    (Increase) decrease in prepaid income taxes. . . . . . . . . . . . . . . . .             248,000            (201,000)
    (Increase) decrease in real estate inventories . . . . . . . . . . . . . . .         (27,198,000)        (18,183,000)
    (Increase) decrease in deposits. . . . . . . . . . . . . . . . . . . . . . .            (574,000)            283,000
    (Increase) decrease in other assets. . . . . . . . . . . . . . . . . . . . .            (252,000)         (1,502,000)
    Increase (decrease) in accounts payable. . . . . . . . . . . . . . . . . . .           1,939,000           4,380,000
    Increase (decrease) in accrued expenses. . . . . . . . . . . . . . . . . . .           3,092,000           1,079,000
    Change in deferred income taxes. . . . . . . . . . . . . . . . . . . . . . .             (83,000)          2,954,000
                                                                                        ------------        ------------
      Net cash provided by (used in) operating activities  . . . . . . . . . . .         (13,609,000)         (3,298,000)

INVESTING ACTIVITIES:
Payment for purchase of Melody Homes and Mortgage, net of cash acquired. . . . .                  --         (29,508,000)
Investment in unconsolidated joint ventures. . . . . . . . . . . . . . . . . . .          (1,000,000)         (3,172,000
Advances to unconsolidated joint ventures. . . . . . . . . . . . . . . . . . . .          (5,359,000)           (180,000)
Repayments of advances to unconsolidated joint ventures. . . . . . . . . . . . .             262,000              98,000
Capital distributions from unconsolidated joint ventures . . . . . . . . . . . .           3,457,000                  --
Purchase of furniture, fixtures, and equipment . . . . . . . . . . . . . . . . .            (181,000)           (597,000)
                                                                                        ------------        ------------
      Net cash provided by (used in) investing activities. . . . . . . . . . . .          (2,821,000)        (33,359,000)

FINANCING ACTIVITIES:
Proceeds from bank borrowings. . . . . . . . . . . . . . . . . . . . . . . . . .         224,478,000         159,481,000
Principal payments on bank borrowings. . . . . . . . . . . . . . . . . . . . . .        (304,562,000)       (124,068,000)
Net (increase) decrease in deferred offering costs . . . . . . . . . . . . . . .            (891,000)            171,000
Proceeds from issuance of senior notes, net of discount. . . . . . . . . . . . .          98,408,000                  --
Net decrease in discount on issuance of senior notes . . . . . . . . . . . . . .              65,000                  --
Proceeds from issuance of common stock from exercise of stock options. . . . . .             101,000                  --
                                                                                        ------------        ------------
      Net cash provided by (used in) financing activities. . . . . . . . . . . .          17,599,000          35,584,000
                                                                                        ------------        ------------
Increase (decrease) in cash. . . . . . . . . . . . . . . . . . . . . . . . . . .           1,169,000          (1,073,000)
Cash and cash equivalents (restricted) at beginning of period. . . . . . . . . .           3,842,000           1,619,000
                                                                                        ------------        ------------
Cash and cash equivalents (restricted) at end of period. . . . . . . . . . . . .        $  5,011,000        $    546,000
                                                                                        ------------        ------------
                                                                                        ------------        ------------
</TABLE>

                               See accompanying notes.


                                       6
<PAGE>


                                SCHULER HOMES, INC.
                                          
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 

1.   General

     The accompanying unaudited consolidated financial statements have been
     prepared in accordance with generally accepted accounting principles for
     interim financial information and with the instructions to Form 10-Q and
     Article 10 of Regulation S-X.  Accordingly, they do not include all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements.  In the opinion of
     management, all adjustments (consisting of normal recurring adjustments)
     considered necessary for a fair presentation have been included.

     These financial statements should be read in conjunction with the Notes to
     Consolidated Financial Statements for the year ended December 31, 1997
     contained in the Company's 1997 annual report on Form 10-K.

     The Company has experienced, and expects to continue to experience,
     significant variability in quarterly sales and net income.  The results of
     any interim period are not necessarily indicative of the results that can
     be expected for the entire year.

     The preparation of financial statements in conformity with generally
     accepted accounting principles 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.
     
     Certain amounts in the accompanying unaudited consolidated financial
     statements have been reclassified to conform to the 1998 presentation.
     
     In July 1998, SHLR of Colorado, Inc. (a wholly-owned subsidiary of the
     Company) was formed to invest in The Ranch-Southpointe II LLC for the
     development and sale of a residential townhouse project in Lafayette,
     Colorado.


2.   Notes Receivable

     Notes receivable consist primarily of notes receivable on seller financed
     sales of residential units and residential lots. The notes provide for
     terms and conditions similar to those offered by financial institutions and
     are collateralized by the residential units and residential lots sold. 
     Certain of the notes are collateralized by second mortgages relating to
     homebuyers who purchased homes as part of the Company's "zero-down" sales
     program.  Revenue and profit recognition on such transactions are deferred
     until the down payment requirement for revenue and profit recognition is
     satisfied.  The collection reserve relating to the sale of certain second
     mortgage notes in 1997 results in a restriction on the Company's cash in
     the amount of approximately $506,000. 
     

3.   Real Estate Inventories

     Inventories which are substantially completed are carried at the lower of
     cost or fair value less cost to sell.  Fair value is determined by applying
     a risk adjusted discount rate to estimates of future cash flows.  In
     addition, land held for future development or inventories under current
     development are adjusted to fair value, only if an impairment to their
     value is indicated.
     
     The estimates of future cash flows require significant judgment relating to
     the level of sales prices, rate of new home sales, amount of marketing
     costs and price discounts needed in order to stimulate sales, rate of
     increase in the cost


                                       7
<PAGE>


     of building materials and labor, introduction of building code
     modifications, and economic and real estate market conditions in general.
     Accordingly, there exists at any date, a reasonable possibility that
     changes in estimates will occur in subsequent periods.

   Real estate inventories at September 30, 1998 consist of the following:

<TABLE>

        <S>                                                            <C>
        Unimproved land held for future development..................  $ 35,757,000
        Development projects in progress.............................   247,278,000
        Completed inventory (including lots held for sale)...........    35,234,000
                                                                       ------------
                                                                       $318,269,000
                                                                       ------------
                                                                       ------------
</TABLE>

     Completed inventory includes residential units which are substantially
     ready for occupancy.


4.   Notes Payable to Bank

     At September 30, 1998, $79,007,000 of the Company's line of credit was
     unused, of which $5,263,000 was restricted as to withdrawal for outstanding
     but unused letters of credit.

     In April 1998, the Company amended certain provisions of its Revolving
     Credit Facility to provide for the issuance of the Senior Notes (see Note
     9).  Effective September 30, 1998, the Company reduced the amount of its
     Revolving Credit Facility from $97,600,000 to $90,000,000.  The Company has
     a one-time option to increase the amount of the facility to $120,000,000.
     In addition, the Company has a one-time option to reduce the amount of the
     facility by $30,000,000 on an irrevocable basis, provided the facility has
     been increased to $120,000,000 for at least six months.  The facility
     expires on July 1, 2001 and includes an option for the lenders to extend
     the term for an additional year as of July 1 of each year. The Company can
     select an interest rate based on either LIBOR (1, 2, 3 or 6 month term) or
     prime for each borrowing.  Based on the Company's leverage ratio, as
     defined, the interest rate may vary from LIBOR plus 1.5% to 2% or prime
     plus 0% to 0.25%.  At September 30, 1998, the Company's outstanding
     borrowings were at interest rates of LIBOR plus 1.75% (7.44% to 7.50%) and
     prime plus 0% (8.25%). Effective October 1, 1998, the interest rates on the
     Company's LIBOR borrowings decreased to LIBOR plus 1.5% (7.25%).  The
     interest rate on such LIBOR borrowings will not decrease below 7.25%, which
     is 1.5% above the fixed interest rate of 5.75% under an interest-rate swap
     agreement ($30,000,000 notional amount). The Company's ability to draw upon
     its line of credit is dependent upon meeting certain financial ratios and
     covenants.
       
     The Company paid interest (relating to notes payable to bank, notes payable
     to others, senior notes and the convertible subordinated debentures) of
     approximately $2,319,000 during the quarter ended September 30, 1998. 
     Interest incurred during the quarter ended September 30, 1998 totaled
     $3,686,000, of which approximately $2,599,000 was capitalized to real
     estate inventories and approximately $1,087,000 was expensed and not
     capitalized, as such interest related to assets which did not meet the
     requirements for capitalization. The difference between the amount of
     interest paid and the amount incurred is comprised of accrued interest
     payable. Interest, previously capitalized to real estate inventories,
     expensed as a component of cost of residential real estate sales during the
     quarters ended September 30, 1998 and 1997 totaled $2,689,000 and
     $1,558,000, respectively.


5.   Related Party Transactions

     From time to time, the Company engages the law firms in which directors of
     the Company are partners.  During the quarterly period ended September 30,
     1998 and 1997, legal fees of approximately $74,000 and $3,000,
     respectively, to such firms were incurred by the Company.


6.   Income Taxes

     During the three months ended September 30, 1998, the Company made income
     tax payments of $2,561,000.


                                       8
<PAGE>

7.   Net Income Per Share

     Basic net income per share for the quarter and nine months ended September
     30, 1998 were computed using the weighted average number of common shares
     outstanding during the periods of 20,113,323 and 20,106,346, respectively.
     Basic net income per share for the quarter and nine months ended September
     30, 1997 were computed using the weighted average number of common shares
     outstanding during the periods of 20,100,177.


     The computation of diluted net income per share for the quarters and nine
     month periods ended September 30, 1998 and 1997 resulted in amounts greater
     than the basic net income per share.  Accordingly, the basic net income per
     share is also presented as the diluted net income per share.

     
8.   Commitments and Contingencies

     In April 1996, the Company was served with a purported class action
     complaint by owners of units and the Association of Owners of Fairway
     Village at Waikele alleging, among other things, material construction
     defects and deficiencies, misrepresentations regarding the cost of
     insurance and breach of a covenant of good faith and fair dealing.  In
     connection with the Courts' denial of a class certification request, a
     second action involving other homeowners at Fairway Village advancing the
     same claims was initiated.  The complaints do not specify an amount of
     damages, but include a claim for punitive damages.  It is likely both
     actions will be consolidated for trial. Although this litigation is at an
     early stage of discovery, based on its current understanding of the
     lawsuits, the Company believes the claims to be largely without merit and
     that potential third party defendants and insurance coverage exist to
     offset a material portion of any damages from the alleged claims and the
     litigation continues to be vigorously defended.  A court date has been set
     for April 1999 for the initial suit but will be reset for a later date if
     the actions are consolidated. If these lawsuits were decided adversely to
     the Company in all material respects, they collectively could have a
     material adverse effect on the Company's business, financial condition and
     results of operations.
     
     The Company is also from time to time involved in routine litigation or
     threatened litigation arising in the ordinary course of its business.  Such
     matters, if decided adversely to the Company, would not, in the opinion of
     management, have a material adverse effect on the financial condition of
     the Company.


9.   Senior Notes

     On May 6, 1998, the Company consummated its offering of $100,000,000
     aggregate principal amount of 9% Senior Notes, which are due April 15,
     2008.  The Company received net proceeds from the offering of approximately
     $97,200,000 (net of discounts and offering costs of approximately
     $2,800,000).  The Company used such proceeds to repay a portion of the
     Company's borrowings under its line of credit.  The offering costs will be
     amortized over the term of the notes using the interest method.  The
     Company offered to exchange its Senior Notes for new notes evidencing the
     same debt as the Senior Notes, which were registered pursuant to a Form S-4
     Registration Statement filed with the U.S. Securities and Exchange
     Commission on July 6, 1998.  Pursuant to such exchange offer, all of the
     Senior Notes were exchanged for new notes.
     
     
10.    Stockholders' Equity

     On July 31, 1998, the Company filed a Form S-8 Registration Statement with
     U.S. Securities and Exchange Commission to register 500,000 shares of the
     Company's common stock for issuance under the Company's Employee Stock
     Purchase Plan.


                                       9
<PAGE>


                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                          
                                          
     Except for historical information contained herein, the matters discussed
in this report contain forward-looking statements that involve risks and
uncertainties.  The Company's actual results may differ materially from the
results discussed in the forward-looking statements.  Factors that might cause
such a difference include, but are not limited to, those risks discussed herein,
and other risks detailed in the Company's Annual Report on Form 10-K and other
documents filed by the Company with the Securities and Exchange Commission from
time to time. 


OVERVIEW

     Schuler Homes, Inc. designs, constructs, markets and sells single-family
residences, townhomes and condominiums primarily to entry-level and first-time
move-up buyers.  The Company operates in five geographic markets:  Colorado,
Hawaii, Northern California, Oregon and Washington.

     For the quarter ended September 30, 1998, sales of residential real estate
(revenue) were $79.2 million and operating income was $7.4 million, compared to
revenues of $61.1 million and operating income of $3.9 million during the third
quarter of 1997.  Net income was $3.6 million ($0.18 per share) for the quarter
ended September 30, 1998, compared to net income of $1.8 million ($0.09 per
share) during the 1997 third quarter.   From the third quarter of 1997 to the
third quarter of 1998, revenues grew 29.7%, net income grew 103.8%, the number
of units closed increased from 423 to 510 and operating profit margins improved
from 6.4% to 9.3%.
     
     On May 6, 1998, the Company consummated its offering of $100 million
aggregate principal amount of 9% Senior Notes due 2008.  The Company received
net proceeds from the offering of approximately $97.2 million  (net of discounts
and estimated offering costs of approximately $2.8 million).  The Company used
such net proceeds to repay a portion of the Company's borrowings under its line
of credit.  The offering costs will be amortized over the term of the notes
using the interest method.  In April 1998, the Company amended certain portions
of its Revolving Credit Facility to provide for the issuance of the Senior
Notes.
     
     Subsequent to September 30, 1998, the Company acquired certain assets of
Keys Homes, Inc. (Keys), a Portland, Oregon homebuilder.  Keys is engaged in the
construction and sale of single-family, duplex and cottage homes targeted for
the entry-level market. During the twelve months ended September 30, 1998, Keys
closed the sales of 193 homes generating revenues of approximately $23.8
million.

     In July 1998, SHLR of Colorado, Inc. (a wholly-owned subsidiary of the
Company) was formed to invest in The Ranch-Southpointe II LLC for the
development and sale of a residential townhouse project in Lafayette, Colorado.


                                       10
<PAGE>


RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage of the
Company's revenues represented by each income statement line item presented.



<TABLE>
<CAPTION>
                                                                 Three months ended          % change in dollar amounts
                                                                   September 30,                       from
                                                                   1998       1997                1997 to 1998
                                                                   ----       ----           --------------------------

<S>                                                              <C>         <C>             <C>
Residential real estate sales..................                    100.0%    100.0%                   29.7%

Costs and expenses:
    Residential real estate sales..............                     79.8      79.7                    29.8
    Selling and commissions....................                      6.5       7.7                     9.5
    General and administrative.................                      5.3       6.5                     6.8
                                                                    ----      ----
              Total costs and expenses.........                     91.6      93.9                    26.6

Income from unconsolidated joint ventures......                      0.9       0.3                   326.1
                                                                    ----      ----
    Operating income...........................                      9.3       6.4                    88.3
Other income (expense).........................                     (2.0)     (1.8)                   48.7
                                                                    ----      ----
    Income before provision for income taxes...                      7.3       4.6                   103.6
Provision for income taxes.....................                      2.8       1.7                   103.2
                                                                    ----      ----
    Net   income...............................                      4.5%      2.9%                  103.8
                                                                    ----      ----
                                                                    ----      ----
</TABLE>

<TABLE>
<CAPTION>
                                                                 Nine months ended          % change in dollar amounts
                                                                   September 30,                       from
                                                                   1998       1997                1997 to 1998
                                                                   ----       ----           --------------------------

<S>                                                              <C>         <C>             <C>

Residential real estate sales..................                    100.0%      100.0%                 23.6%


Costs and expenses:
    Residential real estate sales..............                     79.7        80.8                  21.9 
    Selling and commissions....................                      6.8        7.7                   10.2 
    General and administrative.................                      5.8        6.2                   14.6 
                                                                   -----       ----
              Total costs and expenses.........                     92.3        94.7                  20.4 

Income from unconsolidated joint ventures......                      0.8        0.1                  705.2 
                                                                   -----       ----
    Operating income...........................                      8.5        5.4                   94.1
Other income (expense).........................                     (1.7)      (1.8)                  21.0
                                                                    ----       ----
    Income before provision for income taxes...                      6.8        3.6                  129.5
Provision for income taxes.....................                      2.6        1.4                  131.3
                                                                    ----       ----
    Net income.................................                      4.2%       2.2%                 128.4
                                                                    ----       ----
                                                                    ----       ----

</TABLE>


                                       11
<PAGE>


RESIDENTIAL REAL ESTATE SALES

The Company's sales of residential real estate (revenues) for the quarter ended
September 30, 1998 were approximately $79.2 million as compared to approximately
$61.1 million during the quarter ended September 30, 1997.  This represents an
increase of approximately $18.1 million or 29.7 %.  The increase in revenues
reflects a larger number of unit sales closed in the third quarter of 1998
relative to the third quarter of 1997, coupled with an increase in average sales
prices of homes closed.  The Company's average sales price per unit closed in
the "consolidated" projects (see table below) increased 11.4% to $185,000 during
the third quarter of 1998, from an average sales price per unit closed of 
$166,000 during the third quarter of 1997. The average sales prices of homes
closed increased in the Company's mainland United States divisions as a result
of the strength of the housing markets during the third quarter of 1998 in those
areas, while Hawaii's new home market remained soft.  The increase in the
average sales price of homes closed in the Hawaii division was due primarily to
a difference in product mix between the periods.

The Company's sales of residential real estate (revenues) were approximately
$202.1 million for the nine months ended September 30, 1998, compared to $163.5
million during the same period in 1997, an increase of 23.6%.  The increase is
attributable to the increase in the number and average sales price of  unit
sales closed during the first nine months of 1998 compared to the first nine
months of 1997.  The average sales price per unit closed was $180,000 during the
nine months ended September 30, 1998, compared to $178,000 during the nine
months ended September 30, 1997.

   The following table sets forth the number of sales closed during the quarters
ended September 30, 1998 and 1997, which includes closings of homes and lots
sold pursuant to the Company's "zero-down" sales program and 100% of the sales
closed at projects developed by the Company's joint ventures in Hawaii and
Washington.

<TABLE>
<CAPTION>

                                                Three months ended                Nine months ended
                                                   September 30,                     September 30,
                                                1998           1997               1998         1997
                                                ----           ----               ----         ----
     <S>                                       <C>             <C>                <C>           <C>
     Consolidated:
       Colorado                                 303             288                788          703
       Hawaii (1)                                82              80                235          232
       Northern California                       24               3                 59            3
       Oregon                                    20              --                 44           --
                                               ----            ----              -----         ----
         Total Consolidated                     429             371              1,126          938

     Unconsolidated Joint Ventures:
       Hawaii (2)                                 7              13                 17           23
       Washington (3)                            74              39                190           39
                                               ----            ----              -----        -----
     Total                                      510             423              1,333        1,000
                                               ----            ----              -----        -----
                                               ----            ----              -----        -----

</TABLE>

(1)  Includes homes and lots sold and closed pursuant to the Company's
     "zero-down" sales program in Hawaii. The revenues associated with one
     "zero-down" closing (during the first quarter of 1998) was deferred 
     during the nine months ended September 30, 1998 until the related note
     receivable is paid in full.  There were 3 and 19 "zero-down" closings 
     in the three and nine months ended September 30, 1997, respectively.

(2)  Reflects 100% of the information with respect to the Company's two 50%
     owned joint ventures in Hawaii, Iao Partners and Waiakoa Estates
     Subdivision Joint Venture.

(3)  Reflects 100% of the information with respect to Stafford Homes, in which
     the Company acquired a 49% interest in July, 1997.


                                       12
<PAGE>


COSTS AND EXPENSES - RESIDENTIAL REAL ESTATE SALES

     Cost of residential real estate sales represents the acquisition and
development costs of a project attributable to the homes closed.  Acquisition
and development costs primarily include land acquisition costs, sitework and
construction payments to contractors, engineering and architectural costs, loan
fees, interest and other indirect costs attributable to development and project
management activities and miscellaneous construction costs.

     Cost of residential real estate sales increased from approximately $48.7
million during the quarter ended September 30, 1997 to approximately $63.2
million during the same period in 1998, representing an increase of
approximately $14.5 million or 29.8%.  This increase reflects a higher level of
unit and dollar sales closed during the third quarter of 1998 relative to the
third quarter of 1997.  As a percentage of revenues, cost of residential real
estate sold was  79.8% and 79.7% for the quarters ended September 30, 1998 and
1997, respectively. 
     
   The cost of residential real estate sold increased to approximately $161.1
million during the nine months ended September 30, 1998 from approximately
$132.2 million during the same period in 1997, representing an increase of
approximately $28.9 million or 21.9%, primarily reflecting the larger volume of
home sales closed in 1998 as compared to 1997.

   The cost of residential real estate sold as a percentage of sales decreased
to 79.7% for the nine months ended September 30, 1998 from 80.8% for the nine
months ended September 30, 1997.  The decrease in the cost of residential real
estate sold as a percentage of sales reflects higher margins realized by the
Colorado division primarily due to an increase in average sales prices and
higher margins in the Company's Hawaiian operation primarily as a result of the
impact in 1997 of the recognition of costs related to the sale of second
mortgages associated with zero-down sales deferred in 1996.

     Total interest incurred during the quarters ended September 30, 1998 and
1997 was approximately $3.7 million and $3.1 million, respectively.  Of the
amounts incurred, approximately $1.1 million and $855,000 was expensed currently
(included in Other Expense) in the third quarters of 1998 and 1997,
respectively, and the remaining interest incurred was capitalized to development
projects.   Interest capitalized to projects is expensed through cost of
residential real estate sales as sales are closed and revenue is recognized in
the particular project.  The amount of previously capitalized interest, which
was expensed through cost of residential real estate sales, totaled $2.7 million
and $1.6 million during the quarters ended September 30, 1998 and 1997,
respectively.

     Average debt outstanding was approximately $180.2 million and $167.5
million during the third quarters of 1998 and 1997, respectively.  The Company's
average interest rate on its debt for the quarters ended September 30, 1998 and
1997 was approximately 8.0% and 7.3%, respectively.  The increase from 7.3% to
8.0% is due primarily to the issuance of the Senior Notes at a 9% interest rate
in May, 1998.  The Company's notes payable to banks bear interest based on prime
or LIBOR.  Changes in the prime or LIBOR rates will affect the amount of
interest being capitalized to inventory and subsequently expensed through cost
of residential real estate sales as sales are closed and revenue is recognized.
                                           
COST AND EXPENSES - SELLING AND COMMISSIONS

     Selling costs and commissions represented approximately 6.5% and 7.7% of
sales of residential real estate during the quarters ended September 30, 1998
and 1997, respectively.  Selling costs and commissions represented approximately
6.8% and 7.7% of sales of residential real estate during the nine months ended
September 30, 1998 and 1997, respectively.  These decreases are a result of the
selling costs and commissions increasing at a lower rate than revenues.

COSTS AND EXPENSES - GENERAL AND ADMINISTRATIVE

     General and administrative expense includes salaries, office and other
administrative costs.  Indirect costs attributable to specific projects are
capitalized and deducted as part of cost of residential real estate sales.

     General and administrative expenses increased by $267,000 during the third
quarter of 1998 as compared to the same period in 1997 primarily due to
expansion at the Company's U. S. mainland divisions. As a percentage of sales,


                                       13
<PAGE>


general and administrative expense decreased from 6.5% during the quarter 
ended September 30, 1997 to 5.3% during the quarter ended September 30, 1998, 
which is a result of general and administrative expenses increasing at a 
lower rate than revenues.

     General and administrative expenses increased by $1.5 million or 14.6%
during the first nine months of 1998 as compared to the same period in 1997.  As
a percentage of sales, general and administrative expense was 5.8% and 6.2%
during the first nine months of 1998 and 1997, respectively, which is a result
of general and administrative expenses increasing at a lower rate than revenues.


INCOME FROM UNCONSOLIDATED JOINT VENTURES

     Income from unconsolidated joint ventures represents the Company's 49%
interest in the operations of  Stafford and its 50% interest in the operations
of two joint ventures in Hawaii.  The increase in this income from the three and
nine months ended September 30, 1997 to the same period in 1998 is primarily the
result of the growth in income from the Company's 49% interest in Stafford
Homes.

OTHER INCOME (EXPENSE)

     Other income (expense) represents (i) interest incurred less interest
capitalized to inventory (interest expense), (ii) amortization of financing
fees, net of amounts capitalized to inventory, and (iii) amortization of
goodwill and a covenant-not-to-compete related to the Melody Homes acquisition;
less interest income.  The increase from the three and nine months ended
September 30, 1997 to the comparable periods in 1998 is primarily the result of
an increase in the amount of interest and financing fees expensed during the
third quarter of 1998 compared to the third quarter of 1997.

PROVISION FOR INCOME TAXES

     The Company's effective income tax rate for the third quarters of 1998 and
1997 was approximately 37.9%. 


VARIABILITY OF RESULTS

     The Company has experienced, and expects to continue to experience,
significant variability in sales and net income. Factors that contribute to
variability of the Company's results include:  the timing of home closings, a
substantial portion of which historically have occurred in the last month of
each quarter; the Company's ability to continue to acquire additional land on
favorable terms for future developments;  the condition of the real estate
markets and economies in states in which the Company operates;  the cyclical
nature of the homebuilding industry and changes in prevailing interest rates;
costs of material and labor; and  delays in construction schedules caused by
timing of inspections and approval by regulatory agencies, including zoning
approvals and receipt of entitlements, the timing of completion of necessary
public infrastructure, the timing of utility hookups and adverse weather
conditions.  The Company's historical financial performance is not necessarily a
meaningful indicator of future results and, in general, the Company's financial
results will vary from development to development, and from fiscal quarter to
fiscal quarter.

     Certain of the Company's currently planned projects, as well as future
projects, are anticipated to be longer term in nature than those developed in
the past by the Company.  The increased length of such projects further exposes
the Company to the risks inherent in the homebuilding industry, including
reductions in the value of land inventory. 

     The Company's recent expansion to markets in the mainland United States
further exposes the Company to risks inherent in those markets.  For example, as
a result of the Company's acquisition of Melody, it will encounter construction
issues and risks such as expansive soils and extreme seasonal weather conditions
(dissimilar to those encountered in Hawaii).

     The Company will continue to consider its expansion into additional
selected residential housing markets in the


                                       14
<PAGE>

United States mainland and into certain foreign countries and into 
other related industries.  The Company has and would consider the acquisition 
of or joint venture with an existing company, as well as its own acquisition 
and development of  homebuilding  projects in certain areas, in order to 
facilitate its expansion.   No assurances  can  be given that the Company 
will be able to successfully establish operations outside of its existing 
Hawaiian markets or that such expansion will not adversely affect its results 
of operations.

BACKLOG

     The Company's homes are generally offered for sale in advance of their
construction upon applicable regulatory approval and sold pursuant to standard
sales contracts.  The Company's standard sales contract may be canceled by the
buyer at any time prior to closing.  The Company does not recognize revenues on
homes covered by such contracts until the sales are closed.  Homes covered by
such sales contracts are considered by the Company as its backlog.

     The following table sets forth the Company's backlog for both homes and 
residential lots at September 30, 1998 and 1997, which includes homes and 
lots sold pursuant to the Company's "zero-down" sales program and 100% of
the backlog related to projects developed by the Company's joint ventures
in Hawaii and Washington.

<TABLE>
<CAPTION>

                                              September 30, 1998                      September 30, 1997
                                              ------------------                      ------------------
                                                            Aggregate                              Aggregate
                                             Number         Sales Value              Number       Sales Value
                                             ------         -----------             -------       ------------
      <S>                                    <C>           <C>                      <C>          <C>
      Consolidated:
        Colorado                             414           $ 69,841,000              344         $  51,225,000
        Hawaii                                58             16,771,000               90            25,559,000
        Northern California                   28              4,619,000               16             2,180,000
        Oregon                                46              8,836,000               14             2,618,000
                                             ---           ------------              ---         -------------
          Total Consolidated                 546            100,067,000              464            81,582,000

      Unconsolidated Joint Ventures:
        Hawaii                                 3                355,000                6               762,000
        Washington                            59             15,753,000               47            10,373,000
                                             ---           ------------              ---         -------------
           Total                             608           $116,175,000              517         $  92,717,000
                                             ---           ------------              ---         -------------
                                             ---           ------------              ---         -------------

</TABLE>

     The average sales prices of the homes and lots comprising backlog for 
consolidated projects at September 30, 1998 and 1997 were $183,000 and 
$176,000, respectively. Due to the ability of buyers to cancel their sales 
contracts, no assurances can be given that homes or residential lots in 
backlog will result in actual closings.

YEAR 2000 COMPLIANCE

     The Company has developed and is currently executing a plan designed to 
make its computer systems Year 2000 compliant.  The plan covers four stages 
including (i) inventory, (ii) assessment, (iii) remediation, and (iv) 
testing.  The Company has substantially completed the inventory and 
assessment stages for its systems and applications.  The remediation 
processes, which consist primarily of the replacement of computer software, 
are currently underway.  The remediation process is targeted to be largely 
completed by December 31, 1998. Testing of these systems and applications are 
targeted for completion by mid-1999.

     The Company currently estimates that approximately $75,000 will be incurred
to address Year 2000 issues.  As of September 30, 1998, approximately $50,000
has been incurred and expensed.  The Company anticipates that its Year 2000
costs will be funded from operations, and does not expect to defer any other
information technology projects as a result of its Year 2000 efforts.  The
Company does not anticipate the Year 2000 issue will have material adverse

                                       15
<PAGE>

effects on the business operations or financial performance of the Company.
However, the failure of any internal system to achieve Year 2000 readiness could
result in material disruption to the Company's operations.

     The Company has also initiated discussions with parties with whom it does
business to ensure that those parties have appropriate plans to remediate Year
2000 issues where their systems impact the Company's operations.  The Company is
assessing the extent to which its operations are vulnerable should these
organizations fail to properly remediate the computer systems.  Although the
Company believes that alternative sources of labor and materials will be
available, there can be no assurance that the inability of the Company's key
subcontractors and suppliers to attain Year 2000 compliance will not have a
material adverse effect on the business operations and financial performance of
the Company.  Even where assurances are received from third parties there
remains a risk that failure of systems and products of other companies on which
the Company relies could have a material adverse effect on the Company.

     In addition, the Company is materially reliant on third parties with
respect to its ability to collect sales proceeds and pay its vendors and
employees.  Such third parties include governmental agencies in various
jurisdictions that record the conveyance of property, title and escrow
companies, banks and payroll processing firms.  The Company intends to create a
contingency plan once responses from such third parties to questionnaires have
been received and evaluated.

     The costs of Year 2000 compliance and the foregoing statements are based
upon management's best estimates at the present time, which were derived
utilizing numerous assumptions of future events, including the continued
availability of certain resources, third party modification plans and other
factors.  There can be no guarantee that these estimates will be achieved and
actual results could differ materially from those anticipated.  Specific factors
that might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, the nature and amount of programming
required to upgrade or replace each of the affected programs, the rate and
magnitude of related labor and consulting costs and the success of the Company's
external customers and suppliers in addressing the Year 2000 issue.  The
Company's evaluation is on-going and it expects that new and different
information will become available to it as that evaluation continues. 
Consequently, there is no guarantee that all material elements will be Year 2000
ready in time.

LIQUIDITY AND CAPITAL RESOURCES

     The Company uses it liquidity and capital resources to, among other things,
(i) support its operations including its inventories of homes, home sites and
land; (ii) provide working capital; (iii) fund market expansion, including
acquisitions, investments in and advances to joint ventures, and start-up
operations; and (iv) make interest payments on outstanding debt.

CAPITAL RESOURCES

     The Company anticipates continuing to acquire land for use in its future
homebuilding operations including finished lots and partially developed land. 
The Company currently intends to acquire a portion of the land inventories
required in future periods through takedowns of lots subject to option contracts
entered into in prior periods and under new option contracts.  The use of option
contracts lessens the Company's land-related risk and improves liquidity. 
Because of increased demand for partially developed and finished lots in certain
of the markets where the Company builds homes, the Company's ability to acquire
lots using option contracts has been reduced or has become more expensive.

     In connection with the purchase of its 49% interest in Stafford, the
Company entered into an agreement to make loans available to Stafford in an
aggregate principal amount of up to $10.0 million (increased from $5.0 million
as of June 1, 1998).  In addition, the Company has an option to purchase the
remaining 51% interest in Stafford based on a pre-determined formula, subject to
certain contingencies.  If the Company acquired a majority interest in Stafford,
which may occur as early as January 1999, the Company may refinance or assume
Stafford's existing debt.  As of  September 30, 1998, Stafford's total assets
were approximately $54.0 million and notes payable were approximately $37.8
million, of which $6.5 million was outstanding to the Company.

     The Company anticipates that it has adequate financial resources to satisfy
its current and near-term capital

                                       16
<PAGE>

requirements based on its current capital resources and additional liquidity 
available under existing credit agreements. The Company believes that it can 
meet its long-term capital needs (including, among other things, meeting 
future debt payments and refinancing or paying off other long-term debt as it 
becomes due) from operations and external financing sources, assuming that no 
significant adverse changes in the Company's business, or general economic 
conditions, occur as a result of the various risk factors described elsewhere 
herein and in the Company's Annual Report on Form 10-K, in particular, 
increases in interest rates.

LINES OF CREDIT AND NOTES PAYABLE

   On May 6, 1998, the Company consummated its offering of  $100 million
aggregate principal amount of 9% Senior Notes, which are due April 15, 2008. 
The Company received net proceeds from the offering of approximately $97.2
million (net of discounts and estimated offering costs of approximately $2.8
million).  The Company used such proceeds to repay a portion of the Company's
borrowings under its line of credit.  The offering costs will be amortized over
the term of the notes using the interest method.  In April 1998, the Company
amended certain provisions of its Revolving Credit Facility to provide for the
issuance of the Senior Notes.


   Effective September 30, 1998, the Company reduced the amount of its Revolving
Credit Facility from $97.6 million to $90 million.  The Company has a one-time
option to increase the amount of the facility to $120 million. In addition, the
Company has a one-time option to reduce the amount of the facility by $30
million on an irrevocable basis, provided the facility has been increased to
$120 million for at least six months.  The Revolving Credit Facility expires on
July 1, 2001 and includes an option for the lenders to extend the term for an
additional year as of July 1 of each year.  The Revolving Credit Facility
contains covenants, including certain financial covenants and also contains
provisions which may, in certain circumstances, limit the amount the Company may
borrow.  At October 31, 1998 and September 30, 1998, the Company had bank notes
payable of approximately $23.7 million and $11.0 million, respectively.
   
   The Company has no material off-balance sheet financing arrangements that
would tend to affect future liquidity.  The Company believes that cash flow from
operations and borrowings under its credit facilities will provide adequate cash
to fund the Company's operations at least through 1998.  However, there can be
no assurance that the Company will not require additional financing within this
time frame.  The Company may need to raise additional funds in order to support
more rapid expansion, respond to competitive pressures, acquire complementary
businesses or respond to unanticipated requirements.  The Company may seek to
raise additional funds through private or public sales of debt or equity
securities, bank debt, or otherwise.  There can be no assurance that such
additional funding, if needed, will be available on terms attractive to the
Company, or at all.


                                       17
<PAGE>



                                 SCHULER HOMES, INC.

                             PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

     In April 1996, the Company was served with a purported class action
     complaint by owners of units and the Association of Owners of Fairway
     Village at Waikele alleging, among other things, material construction
     defects and deficiencies, misrepresentations regarding the cost of
     insurance and breach of a covenant of good faith and fair dealing.  In
     connection with the Courts' denial of a class certification request, a
     second action involving other homeowners at Fairway Village advancing the
     same claims was initiated.  The complaints do not specify an amount of
     damages, but include a claim for punitive damages.  It is likely both
     actions will be consolidated for trial. Although this litigation is at an
     early stage of discovery, based on its current understanding of the
     lawsuits, the Company believes the claims to be largely without merit and
     that potential third party defendants and insurance coverage exist to
     offset a material portion of any damages from the alleged claims and the
     litigation continues to be vigorously defended.  A court date has been set
     for April 1999 for the initial suit but will be reset for a later date if
     the actions are consolidated. If these lawsuits were decided adversely to
     the Company in all material respects, they collectively could have a
     material adverse effect on the Company's business, financial condition and
     results of operations.
     
     The Company is also from time to time involved in routine litigation or
     threatened litigation arising in the ordinary course of its business.  Such
     matters, if decided adversely to the Company, would not, in the opinion of
     manage-ment, have a material adverse effect on the financial condition of
     the Company.
     
Items 2 through 5.  Not applicable.

Item 6.  Exhibits and Reports on Form 8-K.
 
     (a)  Exhibits. 

<TABLE>
<CAPTION>

               Exhibit
               Number         Document Description
               --------       --------------------
               <S>            <C>
               10.1           Second Amended and Restated Credit Agreement
                              between the Company, certain Banks, First Hawaiian
                              Bank and Bank of America NT & SA, dated September
                              30, 1998.

               10.2           Guaranty by wholly-owned subsidiaries of the
                              Company, dated September 30, 1998, relating to
                              Second Amended and Restated Credit Agreement dated
                              September 30, 1998.
                                   
               27             Financial Data Schedule.    

</TABLE>


     (b)  Reports on Form 8-K.  There were no reports on Form 8-K for the
          quarter ended September 30, 1998.


                                       18
<PAGE>



                                 SCHULER HOMES, INC.

                                      SIGNATURES


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


                                      SCHULER HOMES, INC.



Date: November 10, 1998               By: /s/ James K. Schuler
                                         ---------------------------------------
                                          James K. Schuler
                                          Chairman of the Board, 
                                          President and Chief Executive Officer
                                          (principal executive officer)



Date: November 10, 1998               By: /s/ Pamela S. Jones
                                         ---------------------------------------
                                          Pamela S. Jones
                                          Senior Vice President of Finance,
                                          Chief Financial Officer and
                                          Director (principal financial officer)



Date: November 10, 1998              By: /s/ Douglas M. Tonokawa
                                        ----------------------------------------
                                         Douglas M. Tonokawa
                                         Vice President of Finance,
                                         Chief Accounting Officer
                                         (principal accounting officer)



                                       19