Looks like moisture.
What's the adjacent grade?

Thanks snoonyb. I don't know what adjacent grade mean though.

The house is on a crawl space about 3 feet above ground? The other side of that wall is the living room.

Thanks.

Adjacent grade generally refers to areas of a lot which intersects the structure, such as planters, landscaping, hillsides etc.
In your case where your house is on a raised foundation I'll assume that the garage slab is lower than the house floor, so there may be a roof leak where the garage roof intersects the house, which may not be evident in the house, just in the garage.

When you pose a problem, asking a probable solution, tell the whole story.
We are not mind readers and few of us have been to your house.

Is the concrete crumbling or are you seeing the expansion joint?

Is there a black paper like substance around the edge?

I really don't know. I tried poking and its gluey.

I don't think I saw black paper around the edge.

Thanks!

How far away from the edge is the "soft" spot?

Poke an inch away. If it's solid I think you're find.

From the picture it looks to me to be the expansion joint.

And gluey sounds like the tar paper like substance it's made of.