Stained Stucco Block Wall
Here's a good example of a stained stucco block
wall. As you can see on the right side of the area I have circled it is
a little bit whiter looking than the area on the left.
Your job as a home inspector is to try and find out why this is. The stains look a little out of place to be caused by sprinklers. Most sprinkler staining would be done to lower areas of the block wall.
You can see there is moss growing on the top of the brick cap, in between the bricks. Could this be a sign of condensation or moisture, Daly city and on the top of the wall, working it's way down the wall on a daily basis. That's one idea.
Could this actually be poor workmanship.
If you look at the bottom of the block wall you will notice the stucco is peeling off and this is a good sign there is moisture in the wall, working its way down.
My best guess would be moisture somehow causing the damage but I cannot say for sure what the actual problem is.