Carlsbad is a great area. Very convenient area to live. I have 2 sets of family living there. All of your upside’s are correct. I have to ask, are the houses there selling for 1997 prices yet? If not, you will have a difficult time getting most people on this board (not me) to recommend buying a house now.
1. Built out is not a downside. At least you know what your neighborhood looks like. Imagine living in the Inland Empire in a new, 2800 sf home. The builder is going broke and decides to blow through their remaining lots by building a bunch of 1600 sf crackerboxes. That will suck when it starts happening soon.
2. Marine layer is an issue? You are trading living on the coast for two months of fog. Big deal.
3. There is traffic on the 15, the 805, the 163, the 52, the 56. You can’t escape it. The 8 east past Alpine is pretty clear.
4. Summer Beach congestion is a problem for people driving to the coast and looking for parking. If you are already there, it isn’t a problem.