MERITAGE CORP. RESPONDS TO TENDER OFFER BY SUMMIT VENTURE PARTNERS


     SCOTTSDALE, Ariz. and DALLAS -- (BUSINESS WIRE) -- Dec. 18, 1998-- Meritage
Corp.,  formerly  Monterey Homes Corp.  (NYSE:MTH)  Friday  reported that it has
become  aware of an  unsolicited  tender  offer by Summit  Venture  Partners  to
purchase up to two (2)  percent of the  outstanding  shares of  Meritage  common
stock.

     Meritage  understands  that on  Nov.  30,  1998,  Summit  Venture  Partners
purportedly  commenced a tender offer for  Meritage  shares at a price of $10.00
per  share,  less any  distributions  paid on or after  Sept.  30,  1998,  which
according to Summit Venture  Partners may not represent fair market value of the
shares.

     The closing price of Meritage  common stock on the New York Stock  Exchange
on Nov. 30, 1998, the date the offer was commenced,  was $14.50 or approximately
45% above the Summit Venture Partner offer price.  The closing price of Meritage
common stock on Dec. 17, 1998 was $13.00.  Meritage strongly recommends that its
shareholders  reject the tender  offer by Summit  Venture  Partners  because the
offer price is inadequate.

     Summit Venture  Partners is in no way affiliated  with Meritage and did not
contact Meritage prior to the commencement of the offer. Meritage learned of the
offer only when investors and brokers called to inquire about it.  Meritage does
not have any other  information  regarding  the tender  offer by Summit  Venture
Partners.

     Meritage  Corp.  designs,   builds  and  sells  distinctive  single  family
semi-custom  luxury and move-up homes in the Phoenix and Tucson,  Arizona areas,
move-up  and entry  level  homes in the in the  Dallas/Fort  Worth,  Austin  and
Houston,  Texas  areas,  and  first and  second  time  move-up  homes in the San
Francisco area.

          CONTACT:  Meritage Corp., Arizona
                    Larry Seay, 602/998-8700
                              or
                    Meritage Corp., Texas
                    Jane Hays, 972/612-8085
                              or
                    Broadgate Consultants, New York
                    Joseph Kist, 212/232-2222