"I'm not sure if the moisture from ground could crawl up the exterior stucco and then dry wall." Yes it's possible if the stucco is in contact with the ground, any cement product will wick moisture because it's porous. Water vapor will also move through the concrete on the floor and the vapor is attracted to hygroscopic materials such as wood products.

With a shovel dig a hole next to the walls of the area effected and see if the ground at and below the foundation is saturated. If so your house is not graded properly, there is a water leak under the slab (waste pipe) or the house sits in the middle of a bowl.

Determine the cause and grade the yard, fix the leak, or if you live in a low area install a sump outside.

Due to condensation, the whole floor seems somewhat misty and currently running a portable humidifier, to minimize the effect.

Did you mean to type "dehumidifier"?

thanks Mike! yes, it is a typo :) l’m running dehumidifier.

Kevin and Charles, thank you so much for the detailed answers and explaining the issue. (I still need to rule out sewage leaks as well, as in this case I see dampness/moisture on the floor, but the tricky part is the foundation is slab foundation and previous owner didn’t give any clue). thanks again!!

If you do suspect a leak in the sewage line a plumber with a drain snake camera can map and pinpoint a problem and reduce damage going through the slab. If the plumber doesn't have camera don't hire them.

Cast and clay pipe can be repaired but there is another pipe which was used between the late 40's and 70's (and yours was built during this time) called Orangeburg pipe and was used as a cheaper alternative, and made from wood pulp and coal tar pitch. I'm not trying to scare and only informing you to the possibility of what might be under your slab.

Just because of the possibility of orangeburg pipe I would suggest a camera inspection for piece of mind, and if it is orangeburg and not completely deteriorated or collapsed it can be replaced with lateral pipe lining without busting up your floors or digging. I wish you luck going forward.

The Silicon Valley area where San Jose is located has soil with a high clay content and the ground can stay damp for a long time after it rains. We recently had a 7-8 day stretch of rainy days and the ground now is definitely damp. Not the best area to have a structure built slab on grade.

I would suspect the possibility of moisture seeping up from the ground. I think you may need to consult a drainage expert. Maybe a solution would be an industrial strength deep french drain system around the perimeter, but I don't know.

I used to live in Santa Clara, the "city" adjacent to San Jose (the Bay Area has many "towns and cities" but they all mostly abut one another and it's one contiguous area). I had a crater-like depression on a rise, where I think the previous owner had had a tree and stump removed. Just a few days of rain would result in it filling with water. It wasn't in a place where adjacent ground drained to. The standing water could remain for as long as a week, that's how poor the drainage is.

Thanks Elmer, that is true, we had a storm recently and even after 7-8 days, I still see the dampness in the backyard. I'll reach out to the contractor eventually for better drainage while I'm doing this is there any test/inspection which you would recommend to make sure if this is the culprit.

I still live in the area, but no longer in Santa Clara. Good luck

Call a plumber first to have the drain line checked, that's a good idea. But if there's no smell, it's less likely to be sewage water