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I live in Santa Cruz CA and have a Magnolia tree we planted in early Spring of '09. It has been beautiful, healthy & green. All of a sudden the leaves are turning yellow and some are drying up and falling off (July) & we are in the midst of one of the mildest Summers in ages.

Any ideas out there for why this is happening. We DEEP water once a week, the area where the tree is located is Southern facing (lots of sun), raised (good drainage) with a healthy layer of mulch & lots of friends (Lavender, rosemary, etc.).

Thanks for the help & best wishes to everyone!

It sound likes disease called "leaf spots". In case of leaf spot disease, the affected foliage is pruned and destroyed. You may also cut the intertwining branches so as to arrest the spread of this disease. It will be better to spray fungicides on young magnolias to prevent this condition.