Carlsbad's first inhabitants were the Luiseño people who located one of their villages, Palamai, near what is today Agua Hedionda Lagoon. Modern-day Carlsbad began in the 1880s when a former sea captain named John Frazier settled there with his family. After he dug a water well for the family farm he decided to generate a small business by selling the water at the nearby train station. It soon became the whistle-stop known as Frazier's Station. The city took its name from the famous European spa of Carlsbad located in the Czech Republic because the water found in a second well dug by Frazier was chemically similar. To take advantage of this find, a partnership named the Carlsbad Land and Mineral Water Company was founded. It was founded by a German-born merchant from the Midwest named Gerhard Schutte, along with Samuel Church Smith, D.D.Wadsworth and Henry Nelson. The area experienced a period of growth, with homes and businesses appearing in the 1880s. Agricultural development of citrus fruits, avocados and olives soon changed the landscape, although Carlsbad is no longer a farming-centered community.
Today Carlsbad is known as a coastal resort town. It was incorporated as a city in 1952 to avoid being annexed by Oceanside. According to the U.S Census estimate, the city had a total population of 92,928 in 2006. The environment is very important to the citizens of the city and they have instituted several ordinances protecting sensitive wildlife habitat, one of the first such ordinances within the state of California. The city has also promised to protect a certain amount of land within city limits from development of any kind, along with spending significant funds to restore habitats destroyed by newer development projects.
Carlsbad is seen to have a high quality of life because of its location, relatively low population density and high performing school districts. In the annual Forbes Magazine ranking of "Most Expensive Zip Codes" in the U.S., the city of Carlsbad placed as one of the top most expensive zip codes. In a recent article published in San Diego's "Riviera" December issue, the magazine reported San Diego County's priciest neighborhoods, stating that "Rancho Santa Fe is the most expensive with the average prices just over $2 million. La Jolla's average is $1.4 million, and Carlsbad is just over $1 million."
Downtown Carlsbad, or "the Village" as it is called by locals, is currently in a process of redevelopment, and features many antique shops, clothing stores, and restaurants. Regular events in the village include a farmers market held on Saturday mornings and Wednesday afternoons and an annual marathon, both of which draw many people from throughout the region to downtown Carlsbad. The Carlsbad Chamber of Commerce also host a bi-annual street fair, called the Carlsbad Village Street Faire, on the first Sundays in May and November. The Village Street Faire is the largest single day street faire in North America with almost 1,000 vendors and well over 120,000 people in attendance.