<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 March 31, 1999

                / / 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.


                                                          Outstanding at
        Class of Common Stock                             April 30, 1999
        ---------------------                             --------------
           $.01 par value                                    20,053,028

<PAGE>

                                SCHULER HOMES, INC.

                                       INDEX

<TABLE>
<S>                                                                       <C>
PART I.   FINANCIAL INFORMATION

Item 1.    Financial Statements

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

               Consolidated Balance Sheets - March 31, 1999 and
                   December 31, 1998. . . . . . . . . . . . . . . . . . . .4

               Consolidated Statements of Income - Three months
                   ended March 31, 1999 and 1998. . . . . . . . . . . . . .5

               Consolidated Statements of Cash Flows - Three
                   months ended March 31, 1999 and 1998 . . . . . . . . . .6

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

Item 2.        Management's Discussion and Analysis of
                    Financial Condition and Results of Operations . . . . .11

PART II.       OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . .19

SIGNATURES          . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

</TABLE>

                                       2
<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 March 31, 1999, and the related consolidated 
statements of income and cash flows for the three-month periods ended March 
31, 1999 and 1998. 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, 1998, 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 15, 1999, 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, 1998, 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
May 13, 1999

                                       3
<PAGE>
                                       
                               SCHULER HOMES, INC.
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                               March 31,1999    December 31, 1998
                                                               -------------    -----------------
                                                                (unaudited)
<S>                                                            <C>              <C>
ASSETS
Cash and cash equivalents (restricted-Note 1).............      $  7,506,000         $  4,915,000
Real estate inventories (Note 2)..........................       397,557,000          325,166,000
Investments in unconsolidated joint ventures (Note 3).....         8,490,000           23,998,000
Deferred income taxes.....................................         3,468,000            3,957,000
Intangibles, net..........................................        13,916,000           13,879,000
Other assets (Note 3).....................................        14,671,000           13,628,000
                                                                ------------         ------------
Total assets..............................................      $445,608,000         $385,543,000
                                                                ------------         ------------
                                                                ------------         ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable..........................................      $ 23,713,000         $ 15,954,000
Accrued expenses..........................................        20,005,000           16,703,000
Notes payable to banks (Note 4)...........................        60,371,000           17,365,000
Notes payable to others...................................         3,585,000            3,954,000
9% senior notes due 2008..................................        98,551,000           98,512,000
6-1/2% convertible subordinated debentures due 2003.......        57,500,000           57,500,000
                                                                ------------         ------------
Total liabilities.........................................       263,725,000          209,988,000
Commitments and contingencies (Notes 4 and 5)
Minority interest in consolidated subsidiary (Note 3).....         1,343,000                  ---
Stockholders' equity (Note 6):
  Common stock, $.01 par value; 30,000,000 shares
    authorized;20,922,028 and 20,892,465 shares issued at
    March 31, 1999 and December 31, 1998, respectively....           209,000              209,000
  Additional paid-in capital..............................        93,396,000           93,201,000
  Retained earnings.......................................        92,552,000           87,762,000
  Treasury stock, at cost; 869,000 shares at March 31,
    1999 and December 31, 1998............................        (5,617,000)          (5,617,000)
                                                                ------------         ------------
Total stockholders' equity................................       180,540,000          175,555,000
                                                                ------------         ------------
Total liabilities and stockholders' equity................      $445,608,000         $385,543,000
                                                                ------------         ------------
                                                                ------------         ------------

</TABLE>
                                       
                             See accompanying notes.

                                       4
<PAGE>
                                       
                               SCHULER HOMES, INC.
                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                              Three months ended March 31,
                                                                          ----------------------------------
                                                                               1999                1998
                                                                          ------------          ------------
                                                                                     (unaudited)
<S>                                                                       <C>                   <C>
 Residential real estate sales...................................         $ 95,893,000          $ 55,512,000

 Costs and expenses:
     Residential real estate sales...............................           75,214,000            43,887,000
     Selling and commissions.....................................            6,149,000             3,920,000
     General and administrative..................................            5,407,000             3,770,000
                                                                          ------------          ------------
         Total costs and expenses................................           86,770,000            51,577,000
                                                                          ------------          ------------
     Operating income............................................            9,123,000             3,935,000

 Income from unconsolidated joint ventures.......................               73,000               358,000
 Minority interest in pretax income of consolidated
   subsidiary (Note 3)...........................................              (93,000)                  ---
 Other income (expense) (Note 4).................................           (1,361,000)           (1,036,000)
                                                                          ------------          ------------
    Income before provision for income taxes.....................            7,742,000             3,257,000
 Provision for income taxes (Note 7).............................            2,952,000             1,256,000
                                                                          ------------          ------------
    Net income...................................................         $  4,790,000          $  2,001,000
                                                                          ------------          ------------
                                                                          ------------          ------------
 Net income per share (Note 8):
    Basic and diluted............................................         $       0.24          $       0.10
                                                                          ------------          ------------
                                                                          ------------          ------------
</TABLE>

                                       
                            See accompanying notes.

                                       5
<PAGE>
                                       
                              SCHULER HOMES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                             Three months ended March 31,
                                                                                       -------------------------------------
                                                                                           1999                      1998
                                                                                       -----------                ----------
                                                                                                      (unaudited)
<S>                                                                                    <C>                        <C>
OPERATING ACTIVITIES:
Net income ......................................................................       $ 4,790,000                $ 2,001,000
Adjustments to reconcile net income to net cash provided by (used in)
   operating activities:
     Depreciation and amortization expense.......................................           872,000                    731,000
     Income from unconsolidated joint ventures...................................           (73,000)                  (268,000)
     Principal payments of notes receivable......................................           581,000                     94,000
     Minority interest...........................................................            93,000                        ---
   Changes in assets and liabilities, net of effects of purchase of 
     additional 40 % interest in Stafford:
    (Increase) decrease in real estate inventories...............................       (20,054,000)                  (256,000)
    (Increase) decrease in other assets..........................................           453,000                   (671,000)
     Increase (decrease) in accounts payable.....................................         2,883,000                 (7,548,000)
     Increase (decrease) in accrued expenses.....................................         5,252,000                 (1,091,000)
     Change in deferred income taxes.............................................           489,000                   (498,000)
                                                                                        -----------                 -----------
       Net cash provided by (used in) operating activities.......................        (4,714,000)                (7,506,000)

INVESTING ACTIVITIES:
Purchase of additional 40% interest in Stafford, net of cash acquired............        (4,227,000)                      ---
Acquisition of certain assets of Keys Homes......................................        (1,000,000)                      ---
Advances to unconsolidated joint ventures........................................               ---                    (53,000)
Repayments of advances to unconsolidated joint ventures..........................            71,000                     42,000
Capital distributions from unconsolidated joint ventures.........................           443,000                  1,750,000
Purchase of furniture, fixtures, and equipment...................................          (468,000)                   (93,000)
                                                                                        -----------                 -----------
       Net cash provided by (used in) investing activities.......................        (5,181,000)                 1,646,000

FINANCING ACTIVITIES:
Proceeds from bank borrowings....................................................        75,990,000                 38,844,000
Principal payments on bank borrowings............................................       (32,984,000)               (31,521,000)
Principal payments on notes payables to others...................................          (376,000)                       ---
Refinancing of Stafford s debt...................................................       (29,378,000)                       ---
Advance to officer (Note 3)......................................................        (1,000,000)                       ---
Net decrease in discount on issuance of senior notes.............................            39,000                        ---
Proceeds from issuance of common stock from exercise of stock options............            30,000                        ---
Proceeds from issuance of common stock under Employee Stock Purchase Plan........           165,000                        ---
                                                                                        -----------                -----------
        Net cash provided by (used in) financing activities......................        12,486,000                  7,323,000
                                                                                        -----------                -----------
Increase (decrease) in cash......................................................         2,591,000                  1,463,000
Cash and cash equivalents (restricted) at beginning of period....................         4,915,000                  3,842,000
                                                                                        -----------                -----------
Cash and cash equivalents (restricted) at end of period..........................       $ 7,506,000                $ 5,305,000   
                                                                                        -----------                -----------
                                                                                        -----------                -----------
</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, 1998
     contained in the Company's 1998 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 Consolidated Financial Statements relating to 1998
     have been reclassified to conform to the 1999 presentation.

     In March 1999, the Company sold second mortgage notes of approximately
     $491,000, resulting in the recognition of sales and gross profit of
     approximately $1,989,000 and $166,000 (net of discount and collection
     allowance relating to the sale), respectively (excludes two sales which
     closed during the first quarter of 1999).  The collection allowance results
     in an increase in the Company's restricted cash of approximately $120,000,
     resulting in a cumulative balance of $626,000 at March 31, 1999.


2.   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 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.

                                       7
<PAGE>

<TABLE>
<S>                                                                                      <C>
     Real estate inventories at March 31, 1999 consist of the following:

        Unimproved land held for future development......................                 $ 36,653,000
        Development projects in progress.................................                  316,949,000
        Completed inventory (including lots held for sale)...............                   43,955,000
                                                                                         -------------
                                                                                          $397,557,000
                                                                                         -------------
                                                                                         -------------
</TABLE>

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

3.   Related Party Transactions

     In January 1999, the Company exercised its option to purchase an 
     additional 40% ownership interest in Stafford Homes (Stafford), 
     increasing its total ownership to 89%.  As a result, the financial 
     statements of Stafford for the quarter ended March 31, 1999 are 
     consolidated with those of the Company.  In connection with this 
     transaction, the Company refinanced Stafford's existing debt, which 
     included certain notes payable to the selling shareholder (Stafford's 
     President).

     Stafford leases its main office building from an affiliate of its 
     President. The Company also leases its main office in Oregon from a 
     family member of the Division President of the Oregon Division.  During 
     the quarter ended March 31, 1999, the Company incurred total rental 
     expense in connection with such leases of approximately $24,000.

     In connection with the acquisition of certain assets of Keys Homes, Inc.
     (Keys) in October 1998, the Division President of the Company's Oregon
     Division (formerly the president of Keys) earns a percentage of the profits
     of the Oregon Division.  In addition, included in Other Assets at March 31,
     1999 is a note receivable of $1,000,000 from the Oregon Division President,
     which was issued on January 4, 1999, is due on December 31, 2005, bears
     interest at 7%, and requires minimum annual payments of $200,000 plus
     accrued but unpaid interest.  Accrued interest receivable relating to the
     note was approximately $17,000 at March 31, 1999.

     From time to time, the Company engages the law firms in which directors of
     the Company are partners.  During the quarterly period ended March 31,
     1999, legal fees of approximately $27,000 to such firms were incurred by
     the Company.


4.   Notes Payable to Banks

     Notes Payable to Banks is comprised of a $90,000,000 Revolving Credit
     Facility with a consortium of banks.  The Company has a one-time option,
     subject to the approval of the Banks, to increase the amount of the
     facility to $120,000,000.  In March 1999, the Company requested the Banks'
     approval to increase the facility to $120,000,000. The Banks' are currently
     reviewing the Company's request.  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%. The Company's ability
     to draw upon its line of credit is dependent upon meeting certain financial
     ratios and covenants.  As of March 31, 1999, the Company met such financial
     ratios and covenants.

     The Company has an interest rate swap to pay LIBOR (currently fixed at
     5.75%) on $30,000,000, while receiving in return an interest payment at a
     floating one-month LIBOR.  However, if the one-month LIBOR resets at or
     above 7%, the swap reverses for that payment period and no interest
     payments are exchanged.  The interest rate differential to be received or
     paid is recognized during the period as an adjustment to interest incurred.
     The interest rate swap terminates on August 1, 2003.

                                       8
<PAGE>

     Notes Payable to Banks at March 31, 1999 consist of borrowings under its 
     credit facilities. At March 31, 1999, the Company's bank borrowings were 
     at interest rates of prime (7.75%) and LIBOR plus 1.5% (6.5% to 6.69%). 
     At March 31, 1999, $29,629,000 of the Company's line of credit is 
     unused, of which $6,249,000 is restricted for outstanding but unused 
     letters of credit.

     In April 1999, the Company entered into a separate 90-day $10,000,000 
     line of credit with one of the banks included in the $90,000,000 
     Revolving Credit Facility.

     The interest amounts in this paragraph relate to Notes Payable to Banks, 
     Notes Payable to Others, Senior Notes and the Convertible Subordinated 
     Debentures. The Company paid interest of approximately $2,901,000 during 
     the quarter ended March 31, 1999. Interest incurred during  the quarter 
     ended March 31, 1999 was approximately $4,367,000. All of such interest 
     was capitalized to real estate inventories except for $941,000, which 
     was expensed (included in Other Income (Expense)) and not capitalized, 
     as such interest 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 quarter ended March 31, 1999 
     totaled $2,960,000.

5.   Commitments and Contingencies

     At March 31, 1999, the Company had under contract to purchase for 
     approximately $4,000,000, land for residential development.

     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.
     Following the Courts' denial of a class certification request, a second
     action involving other homeowners at Fairway Village advancing the same
     claims was initiated.  While the Company believed the claims to be largely
     without merit, during April 1999, a settlement agreement was entered into
     by the Company, third party defendants, insurance carriers and all of the
     plaintiffs in both lawsuits, except for the owners of three units.  The
     settlement amount incurred by the Company will be charged against the
     warranty accruals previously established by the Company.  Although the cost
     of remediation for certain units called for under the settlement agreement
     is not determinable until the work is completed, the Company believes that
     the cost of such work will not exceed its warranty accruals.  A new trial
     date in December 1999 has been set for the initial suit, which has two
     remaining plaintiffs.  No trial date has been set in the second action,
     which includes one remaining plaintiff.  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.

     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.


6.   Stockholders' Equity

     During the quarter ended March 31, 1999, options to purchase 110,400 shares
     of common stock were granted.  During the quarter ended March 31, 1999,
     options were exercised, resulting in the issuance of 5,375 shares of common
     stock.  In addition, 24,188 shares were issued on February 26, 1999
     pursuant to the Company's Employee Stock Purchase Plan.


7.   Income Taxes

     During the three months ended March 31, 1999, the Company made income tax
     payments of $600,000.

                                       9
<PAGE>


8.   Net Income Per Share

     Basic net income per share for the quarters ended March 31, 1999 and 1998
     were computed using the weighted average number of common shares
     outstanding during the quarters of 20,034,801 and 20,100,927, respectively.

     The computation of diluted net income per share for the quarters ended
     March 31, 1999 and 1998 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.

                                       10
<PAGE>

                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS


     Except for historical information contained herein, matters discussed in
Management's Discussion and Analysis of Financial Condition and Results of
Operations contain "forward-looking statements" within the meaning of the
Private Securities Litigation Act of 1995 that involve risks and uncertainties.
The Company's actual results may differ materially from the results discussed in
the forward-looking statements. Forward-looking statements are based on various
factors and assumptions that include risks and uncertainties, including, but not
limited to the costs and achievability of Year 2000 compliance, the closing and
profitability of sales in backlog reported, the market for homes generally and
in areas where the Company operates, the availability and cost of land, changes
in economic conditions and interest rates, increases in raw material and labor
costs, consumer confidence, government regulation, weather conditions and
general competitive factors, all or each of which may cause actual results to
differ materially.  In addition, other factors that might cause such a
difference include 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 March 31, 1999, sales of residential real estate
(revenue) were $95.9 million  and operating income was $9.1 million, compared to
revenues of $55.5 million and operating income of $3.9 million during the first
quarter last year.  Net income was $4.8 million ($0.24 per share) for the
quarter ended March 31, 1999, compared to net income of $2.0 million ($0.10 per
share) during the 1998 first quarter.   From the first quarter of 1998 to the
first quarter of 1999, revenues grew 72.7%, net income grew 139.4%, the number
of units closed increased from 390 to 508 and operating profit margins improved
from 7.1% to 9.6%.

     In January 1999, the Company exercised its option to purchase an additional
40% ownership interest in Stafford Homes (Stafford), increasing its total
ownership to 89%.

                                       11
<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
                                                       March 31,                   from
                                                 1999          1998             1998 to 1999
                                                ------        ------           --------------
<S>                                              <C>           <C>             <C>

 Residential real estate sales                    100%         100.0%               72.7%
                                                                            
 Costs and expenses:                                                        
     Residential real estate sales                78.4          79.1                71.4
     Selling and commissions                       6.4           7.0                56.9
     General and administrative                    5.6           6.8                43.4
                                                  ----          ---- 
               Total costs and expenses           90.4          92.9                68.2
                                                  ----          ---- 
 Operating income                                  9.6           7.1               131.8
 Income from unconsolidated joint ventures         0.1           0.7               (79.6)
 Minority interest in pretax income of
   consolidated subsidiary                        (0.1)          ---                 N/A
 Other income (expense)                           (1.5)         (1.9)               31.4
                                                  ----          ---- 
 Income before provision for income taxes          8.1           5.9               137.7
 Provision for income taxes                        3.1           2.3               135.0
                                                  ----          ---- 
     Net income                                    5.0%          3.6%              139.4
                                                  ----          ---- 
                                                  ----          ---- 

</TABLE>

RESIDENTIAL REAL ESTATE SALES

     The Company's Residential Real Estate Sales (revenues) for the quarter 
ended March 31, 1999 were approximately $95.9 million as compared to 
approximately $55.5 million during the quarter ended March 31, 1998.  This 
represents an increase of approximately $40.4 million or 72.7%.  The increase 
in revenues reflects a larger number of unit sales closed at higher average 
sales prices in the first quarter of 1999 relative to the first quarter of 
1998. The Company's average sales price per unit increased to $187,000 during 
the 1999 first quarter (including 11 sales that closed prior to January 1, 
1999 under the Company's "zero-down" sales program, for which the second 
mortgages were sold during the 1999 first quarter), an increase from an 
average sales price per unit during the 1998 first quarter of  $170,000.

     As a result of the increase in the Company's ownership of Stafford to 
89% in early 1999, the operating results of Stafford are consolidated with 
those of the Company during the quarter ended March 31, 1999, contributing to 
the Company's higher 1999 first quarter revenues and average sales prices as 
compared to the first quarter of 1998. Stafford's average sales price of home 
sales closed was $245,000 during the quarter ended March 31, 1999.

     During the first quarter of 1999, the Company recognized $2.0 million of 
deferred revenue related to 11 sales that closed prior to 1999 pursuant to 
the Company's zero-down sales program, in which the Company provided new home 
buyers with second mortgages of up to 20% of the purchase price.  Revenue and 
profit recognition on these zero-down sales were deferred until the 
requirements for revenue and profit recognition were satisfied, which 
occurred during the first quarter of 1999 when the second mortgages were sold.

                                       12
<PAGE>

   The following table sets forth the number of sales closed during the quarters
ended March 31, 1999 and 1998, which includes 100% of the sales closed at
projects developed by the Company's joint ventures.

<TABLE>
<CAPTION>
                                                  Three months ended March 31,
                                                       1999           1998
                                                       ----           ----
<S>                                                    <C>            <C>
 Consolidated:

   Colorado                                              296            242 
   Hawaii (1)                                             65             59 
   Northern California                                    23             15 
   Oregon                                                 60             10 
   Washington (3)                                         57             -- 
                                                       -----          -----
     Total Consolidated                                  501            326 
                                                                         
 Unconsolidated Joint Ventures:                          
   Hawaii (2)                                              7              3
   Washington (3)                                         --             61
   Colorado (4)                                           --             --
                                                       -----          -----
 Total                                                   508            390
                                                       -----          -----
                                                       -----          -----
</TABLE>

(1)  Excludes 11 sales that closed prior to January 1, 1999 under the Company's
     "zero-down" sales program, for which the second mortgage notes were sold
     during the 1999 first quarter.
(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.  In January 1999, the
     Company increased its ownership interest in Stafford Homes to 89%.
(4)  Reflects 100% of the information with respect to the Company's 50%-owned
     joint venture in Colorado, The Ranch-Southpointe II LLC, which was entered
     into in July 1998.

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 $43.9 
million during the quarter ended March 31, 1998 to approximately $75.2 
million during the same period in 1999, representing an increase of 
approximately $31.3 million or 71.4%.  This increase reflects a higher level 
of unit and dollar sales closed during the first quarter of 1999 relative to the
first quarter of 1998 and the consolidation of Stafford's operating results 
with those of the Company during the quarter ended March 31, 1999.  As a 
percentage of revenues, Cost of Residential Real Estate Sales decreased from 
79.1% to 78.4%.  This decrease is largely attributable to higher average 
selling prices in the Company's Colorado division.

     Total interest incurred during the quarters ended March 31, 1999 and 
1998 was approximately $4.4  million and $2.9 million, respectively.  Of the 
amounts incurred, approximately $941,000 and $826,000 was expensed currently 
(included in Other Income (Expense)), in the first quarters of 1999 and 1998, 
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 $3.0 million and $1.7 million during the quarters ended March 31, 
1999 and 1998, respectively.

                                       13
<PAGE>

     Average debt outstanding was approximately $229.0 million and $163.1 
million during the first quarters of 1999 and 1998, respectively.  The 
Company's average interest rate on its debt for the quarters ended March 31, 
1999 and 1998 was approximately 7.7% and 7.3%, respectively.  The increase 
from 7.3% to 7.7% 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

     Sales and marketing costs represented approximately 6.4% and 7.0% of 
revenues during the quarters ended March 31, 1999 and 1998, respectively.  
The reduction in selling and commission costs as a percentage of revenues is 
a result of selling and commission costs increasing at a lower rate than 
revenues.

COSTS AND EXPENSES - GENERAL AND ADMINISTRATIVE

     General and Administrative Expenses include 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 $1.6 million during the 
first quarter of 1999 as compared to the same period in 1998 primarily due to 
expansion at the Company's U.S. mainland divisions and the consolidation of 
Stafford's operating results with those of the Company during the quarter 
ended March 31, 1999.  As a percentage of sales, General and Administrative 
Expenses decreased from 6.8% during the quarter ended March 31, 1998 to 5.6% 
during the quarter ended March 31, 1999.  This decrease is a result of 
General and Administrative Expenses increasing at a lower rate than revenues.

INCOME FROM UNCONSOLIDATED JOINT VENTURES

   During the first quarter of 1999, Income from Unconsolidated Joint 
Ventures represents the Company's 50% interest in the operations of two joint 
ventures in Hawaii. During the quarter ended March 31, 1998, Income from 
Unconsolidated Joint Ventures represented the Company's 49% interest in the 
operations of Stafford in addition to its 50% interest in the operations of 
two joint ventures in Hawaii.  The decrease in this income from the first 
three months of 1998 to the same period in 1999 is primarily the result of 
Stafford being accounted for as a consolidated subsidiary for the quarter 
ended March 31, 1999, rather than an unconsolidated joint venture, due to the 
increase of the Company's ownership interest to 89% in January 1999.

MINORITY INTEREST IN PRETAX INCOME OF CONSOLIDATED SUBSIDIARY

   Minority Interest in Pretax Income of Consolidated Subsidiary represents 
the income relating to the 11% of Stafford not owned by the Company.

OTHER INCOME (EXPENSE)

     Other Income (Expense) consists primarily of (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 covenants-not-to-compete; less interest income.  
The increase in Other Income (Expense) of $325,000 from the first three 
months of 1998 to the comparable period in 1999 is primarily due to an 
increase in interest expense resulting from the consolidation of Stafford.

PROVISION FOR INCOME TAXES

     The Company's effective income tax rate for the first quarters of 1999 
and 1998 was approximately 38.1% and 38.6%, respectively.

                                       14
<PAGE>

VARIABILITY OF RESULTS; OTHER FACTORS

     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 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, geographic area 
to geographic area, and from fiscal quarter to fiscal quarter.

     Certain of the Company's currently planned projects as well as future 
projects, particularly in Hawaii, 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 on the mainland United States 
further exposes the Company to risks inherent in those markets.  For example, 
the Company will encounter construction issues and risks such as expansive 
soils and extreme seasonal weather conditions in Colorado (dissimilar to 
those encountered in Hawaii).

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

In addition, the Company believes that the market price of its common stock 
may at times be adversely affected due to the Company's relatively small size 
when compared to certain other publicly traded national homebuilding firms. 
The Company further believes that the price of its common stock may be 
adversely affected due to the relatively low trading volume for its shares.

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.

                                       15
<PAGE>

     The following table sets forth the Company's backlog for both homes and 
residential lots at March 31, 1999 and 1998, 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 unconsolidated joint 
ventures.

<TABLE>
<CAPTION>
                                        March 31, 1999               March 31, 1998
                                        --------------               --------------
                                                    Aggregate                Aggregate
                                    Number         Sales Value   Number      Sales Value
                                    ------        ------------   ------      -----------
<S>                                 <C>            <C>           <C>         <C>
Consolidated:
  Colorado                             523        $ 91,798,000     340       $53,084,000
  Hawaii                                88          24,294,000      85        24,970,000
  Northern California                   70          14,702,000      21         2,995,000
  Oregon                               111          19,961,000      22         4,319,000
  Washington                            62          15,109,000     ---               ---
                                      ----        ------------    ----      ------------
    Total Consolidated                 854         165,864,000     468        85,368,000

Unconsolidated Joint Ventures:    

  Hawaii                                 3             390,000       5          585,000
  Washington                           ---                 ---      80       19,564,000
  Colorado                              42           6,623,000     ---              ---
                                      ----        ------------    ----     ------------

Total                                  899        $172,877,000     553     $105,517,000
                                      ----        ------------    ----     ------------
                                      ----        ------------    ----     ------------
</TABLE>

     The average sales prices of the homes and lots comprising backlog for 
consolidated projects at March 31, 1999 and 1998 were $194,000 and $182,000, 
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, assessment 
and remediation stages for its systems and applications. The Company has 
started its testing of these systems and applications, and expects to 
complete a majority of such testing by mid-1999.

     The Company currently estimates that approximately $110,000 will be 
incurred to address Year 2000 issues. As of March 31, 1999, approximately 
$70,000 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 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 

                                       16
<PAGE>

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 January 1999, the Company increased its ownership interest in 
Stafford to 89% and refinanced Stafford's existing debt.  The Company 
anticipates that it will acquire the remaining 11% interest in Stafford in 
January 2001.

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

NOTES PAYABLE

   On May 6, 1998, the Company consummated its offering of $100.0 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.

The Company's Notes Payable to Banks is comprised of a $90.0 million 
Revolving Credit Facility with a consortium of banks.  The Company has a 
one-time option, subject to the approval of the Banks, to increase the amount 
of the facility to $120.0 million.  In March 1999, the Company requested the 
Banks' approval to increase the facility to $120.0 million.  Although no 
assurances can be given that the Banks will approve this request, the Company 
believes this increase to the facility will be consummated by mid-1999.  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 $120.0 

                                       17
<PAGE>

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 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%.  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.  In April 1999, the Company entered 
into a separate 90-day $10.0 million line of credit with one of the banks 
included in the $90.0 million Revolving Credit Facility.  At April 30, 1999, 
and March 31, 1999, the Company had bank notes payable of approximately $69.0 
million and $60.4 million, respectively.

COMMITMENTS

   At April 30, 1999, the Company has commitments to purchase parcels of land 
for approximately $4 million. The Company expects to utilize a combination of 
cash flow from operations and bank financing to purchase these land parcels. 
The Company intends to consummate the purchases of  these land parcels 
between 1999 and 2000.  However, no assurances can be given that these 
purchases will be completed.

   The Company has no material commitments or 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 1999. 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.

                                       18
<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.
     Following the Courts' denial of a class certification request, a second
     action involving other homeowners at Fairway Village advancing the same
     claims was initiated.  While the Company believed the claims to be largely
     without merit, during April 1999, a settlement agreement was entered into
     by the Company, third party defendants, insurance carriers and all of the
     plaintiffs in both lawsuits, except for the owners of three units.  The
     settlement amount incurred by the Company will be charged against the
     warranty accruals previously established by the Company.  Although the cost
     of remediation for certain units called for under the settlement agreement
     is not determinable until the work is completed, the Company believes that
     the cost of such work will not exceed its warranty accruals.  A new trial
     date in December 1999 has been set for the initial suit, which has two
     remaining plaintiffs.  No trial date has been set in the second action,
     which includes one remaining plaintiff.  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.

     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.


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                   Promissory Note between the Company and
                                        First Hawaiian Bank, dated April 12, 1999.

                 27                     Financial Data Schedule.
</TABLE>

     (b)  Reports on Form 8-K.  There were no reports on Form 8-K for the 
quarter ended March 31, 1999.

                                       19
<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 thereto duly authorized.

                                     SCHULER HOMES, INC.




Date:  May 14, 1999                   By: /s/ James K. Schuler
                                         -------------------------------------
                                          James K. Schuler
                                          Chairman of the Board,
                                          President and Chief Executive Officer
                                          (principal executive officer)



Date:  May 14, 1999                  By:  /s/ Pamela S. Jones
                                         -------------------------------------
                                          Pamela S. Jones
                                          Senior Vice President of Finance,
                                          Chief Financial Officer and
                                          Director (principal financial officer)



Date:  May 14, 1999                  By:  /s/ Douglas M. Tonokawa
                                         -------------------------------------
                                          Douglas M. Tonokawa
                                          Vice President of Finance,
                                          Chief Accounting Officer
                                          (principal accounting officer)


                                       20
<PAGE>