(MONEY Magazine) – Drumroll, please. The winner of this year's survey of the best places to live in the U.S.A. is a booming New York City exurb with country charm: Danbury, Conn. The Danbury metropolitan area, situated in the lush Housatonic River Valley, unseated Nashua, N.H., last year's winner, because of a lower crime rate, slightly better schools and its proximity to New York's City museums, theaters and topflight hospitals. MONEY's top 10 places are dominated by the Northeast and California. Both regions have only 2% to 4% unemployment rates, boast world-renowned medical specialists and offer plenty of leisure activities. Some, such as Danbury, Central New Jersey and Nashua, have enviably low crime rates as well. There are trade-offs, however. The top places come at a price: living costs, notably for housing, far exceed U.S. averages. Here's how our ranking was done: We asked a statistically representative sample of 251 MONEY subscribers (median age: 42; median household income: $61,000) to rate each of 50 regional characteristics on a scale of 10 (for most prized) down to 1. Their three most desired attributes turned out to be a low crime rate, the likelihood that house prices will appreciate and the availability of doctors. We then sifted through pounds of government and private data about the 300 largest metropolitan statistical areas, as the Census Bureau calls them. Additional data were contributed by Bert Sperling, a researcher with a computer program that helps people choose where to live (Places U.S.A., Fast Forward, P.O. Box 14706, Portland, Ore. 97214; $74.95). Then we awarded points based on a proprietary formula of how well each area scored on the attributes our readers said they desire. Two criteria were basically subjective. We measured every place's weather against San Diego's (270 days of sunshine and no snow). As for civic pride, a largely unquantifiable factor our subscribers consider quite important, we turned to a logical proxy, the percentage of adults registered to vote in each metropolitan area. Fourteen MONEY staffers and correspondents visited the 10 top and 10 bottom places. We discovered plenty of anomalies. For example, the top-rated Danbury region had drawbacks: a three-bedroom house typically costs $175,000 or more. By contrast, the Atlantic City area, this year's No. 300 (see the box on page 83), has a marvelous five-mile stretch of boardwalk beachfront, stately houses in surrounding towns, and an outstanding public library. Some places rose dramatically from a year ago, while others fell. The streaking stars included many midwestern cities with growing economies, such as Cincinnati (up from No. 104 to No. 31) and Cleveland (No. 83 to No. 22). Areas that dropped the most from 1987 tended to be relatively crime-free and inexpensive towns plagued by weak economies, such as Houma/Thibodaux, La. (down from No. 11 to No. 128), Scranton/Wilkes-Barre, Pa. (down from No. 9 to No. 114) and Wheeling, W.Va. (No. 3 to No. 45). Our staffers also visited the 10 places that ranked lowest last year specifically to see what, if anything, had changed. In general, not much had. Still, many of the residents are resolutely optimistic about their hometowns. Said Frank Muser, director of fiscal services in Odessa, Texas (up to No. 283 from No. 295): ''I think the worst is over, here.''

1. Danbury, Conn. Area population: 158,000 Three-bedroom house: $175,000 to $250,000 Property taxes: $1,600 to $2,000 Unemployment rate: 2.4% Average low temperature, January: 16 degrees Average high temperature, July: 84 degrees Robberies per 100,000 people: 36 Adults registered to vote: 68%

When MONEY readers said that they wanted to live in a place with a vibrant local economy, a low crime rate, low state income taxes and superior public schools, they were unknowingly describing the sprawling Danbury area. Located 25 miles from the Berkshire mountains in western Connecticut and 60 miles from New York City, the L-shaped, 308-square-mile region includes northern Fairfield County and the picturesque farm country of lower Litchfield County. The city of Danbury itself has a wide ethnic and racial mix, including nearly 30% Portuguese and Asian, but its nine neighboring towns are predominately white. About 25% of adults commute to work in other parts of Connecticut and New York City. Until 40 years ago, Danbury was the hatmaking capital of the world. Today the region owes its low jobless rate to its diverse economy. No one company dominates. Union Carbide, with headquarters in Danbury, has the largest corporate payroll -- some 2,000 persons. Other sizable employers: Kimberly- Clark, a paper products manufacturer, and Grolier, a publisher. A labor shortage throughout the region makes even unskilled jobs lucrative. For example, Sean Kimberley, 16, has been earning $6 an hour washing dishes three days a week at a local restaurant. (For more about the Danbury metropolitan area and why the Kimberleys, a typical family, like it there, see the box above.)

2. Central New Jersey Area population: 935,000 Three-bedroom house: $165,000 to $265,000 Property taxes: $2,500 to $4,000 Unemployment rate: 2.2% Average low temperature, January: 25 degrees Average high temperature, July: 85 degrees Robberies per 100,000 people: 69 Adults registered to vote: 66.8%

Years ago, Central New Jersey was dismissed as little more than a network of highways you took to get somewhere else. Now, though, the people living in the three central counties of Middlesex, Somerset and Hunterdon are having the last laugh. Total job growth amounted to more than 30% during the 1980s, and per capita personal income climbed to $21,142, the fourth highest in the nation. The highways helped. The key to attracting new businesses, such as AT& T's decision to put the main office for its business markets group in Bridgewater, was the recent completion of Route 78, which extends from New York City to Allentown, Pa. This construction helped residents throughout the state to get to jobs in that area. The three counties are diverse: Middlesex, with the busy port of Perth Amboy, is the most industrial. Somerset has ranch-size, multimillion-dollar estates that are home to Mike Tyson, Whitney Houston and Jackie Onassis. Hunterdon is mostly a pastiche of rural bedroom communities. This relatively unspoiled part of the state is also within an easy commute to the fast-growing Princeton corridor. The Central New Jersey economy, particularly in Hunterdon County, is so expansive that one of the biggest worries is overloading the roads. Some residents, accustomed to seclusion, actively oppose state-mandated plans for subsidized townhouses or apartments.

3. Norwalk, Conn. Area population: 129,000 Three-bedroom house: $250,000 to $400,000 Property taxes: $2,500 to $3,500 Unemployment rate: 1.9% Average low temperature, January: 23 degrees Average high temperature, July: 82 degrees Robberies per 100,000 people: 104 Adults registered to vote: 68%

Like neighboring Danbury, 22 miles north along Route 7, Norwalk is terrific -- if you can afford it. Virtually anyone who wants a job in the area can have one. Those who prefer working (or playing) in New York City can do that too, albeit after an hour's train trip each way on the fairly reliable Metro-North Commuter Railroad. Unlike landlocked Danbury, Norwalk offers the many pleasures of the Long Island Sound, which is evolving into a major regional tourist attraction. A $22 million harborside aquarium-museum-movie complex called the Maritime Center was scheduled to open July 16. It will be part of the neighborhood called SoNo, short for South Norwalk, which offers visitors trendy restaurants and arts and crafts galleries. The double-digit price-appreciation rate of 1985 and 1986 has left the area with stratospheric housing costs, even though home prices have barely moved from a year ago. Currently, Norwalk has a glut of one-bedroom harborside condominiums selling for about $160,000, down 5% from last summer. The 1986 tax reform law sharply cut back interest by investors in apartment buildings, and most people do not expect values to soar anytime soon. Property taxes are steep too, and the state taxes investors heavily: the rate on interest and dividends goes as high as 12%. But Connecticut's lack of an income tax on employment earnings helps offset that.

4. Long Island, N.Y. Area population: 2.7 million Three-bedroom house: $210,000 to $365,000 Property taxes: $2,800 to $4,500 Unemployment rate: 2.4% Average low temperature, January: 25 degrees Average high temperature, July: 83 degrees Robberies per 100,000 people: 116 Adults registered to vote: 64.9%

Long Island, which benefited from being near Manhattan in our scoring system, has come a long way from its early Levittown days. Today it is one of 19 metropolitan areas nationwide with an unemployment rate at or below 2.4%. It also enjoys the nation's highest median household disposable income, $45,412, according to Sales & Marketing Management magazine. Long Island offers both intellectual and physical stimulation. Many local schools are considered excellent; this year six of its elementary schools were cited in the U.S. Department of Education's Recognition Program. There are 1,200 miles of shoreline, three racetracks and the Nassau Coliseum, home of pro hockey's Islanders. If that's not enough diversion, New York City is within an hour's ride by train or car, assuming you avoid rush hours. On the other hand, many of the 200,000 or so residents who commute daily to New York City can't avoid that ordeal, sometimes spending three hours in traffic jams or in stalled trains. Energy costs are high and are rising. Residents face a 5% increase in their utility bills in each of the next three years to pay for the now closed Long Island Lighting Co. Shoreham nuclear plant. Some local jobs may soon be lost as a result of Suffolk County's recent passage of video display terminal (VDT) legislation. The law requires that companies with 20 or more VDTs pay 80% of the cost of eye exams and glasses for employees using them more than 26 hours a week. That's good news for employees covered, but already businesses, including Metropolitan Life and New York Telephone, have halted some expansion plans.

5. San Francisco Area population: 1.6 million Three-bedroom house: $250,000 to $350,000 Property taxes: $2,500 to $3,500 Unemployment rate: 3.4% Average low temperature, January: 41 degrees Average high temperature, July: 74 degrees Robberies per 100,000 people: 380 Adults registered to vote: 65.1%

Great parks . . . good food . . . wineries only 90 minutes from Union Square. Visitors and residents alike have long commented on San Francisco's friendly and relaxed atmosphere. Elaine Hahn, a money manager who moved here from Boston five years ago, says: ''People have a better balance between their personal and professional lives than I've seen on the East Coast.'' Temperate weather also pleases residents. The mercury does not drop below freezing and rarely tops 90 degrees. The 1,000-acre Golden Gate Park is filled with strollers, joggers, cyclists, % jugglers and kite fans daily. There are first-rate opera, ballet and symphony, as well as four professional sports teams. Medical care is among the country's best. Both Stanford University Medical Center and the University of California San Francisco Medical Center are teaching hospitals known for their organ-transplant, cancer, neonatal and trauma facilities. It was San Francisco's score in the health category that helped catapult the area into our top 10.

The major drawback: the cost of living. Location Management Services, a consulting firm in Palo Alto, found that more than 40% of the San Francisco- area manufacturers planned to expand or relocate elsewhere because of the cost of labor, space and employee health insurance.

6. Nashua, N.H. Area population: 158,000 Three-bedroom house: $120,000 to $175,000 Property taxes: $2,000 to $3,000 Unemployment rate: 2.5% Average low temperature, January: 16 degrees Average high temperature, July: 79 degrees Robberies per 100,000 people: 20 Adults registered to vote: 71%

MONEY's No. 1 place to live last year dropped five notches primarily because Danbury has a lower overall crime rate. Still, Nashua remains exceedingly appealing. Southern New Hampshire's economy pulsates, violent crime is practically nonexistent and the state still has no income or sales tax. Nashua's location makes it close to Boston, the Atlantic Ocean and White Mountain skiing. Rapid growth has its costs, however. Nashua Memorial Hospital raised its daily, semiprivate room rate by 26.5% last year, to $210, though that's still below the national average of $252, according to the Health Insurance Association of America. Housing remains a particular worry. A three-bedroom home that sold for $123,000 in 1986 now goes for $144,000. Drug arrests, mostly for cocaine possession and sales, were up 12% to 317 in 1987. A county attorney calls Nashua the ''drug paraphernalia distribution center of southern New Hampshire.'' Yet small-town charm prevails. On a personal level, Cynthia Dokmo, nearby Amherst, N.H.'s planning board chairman, bemoans the fact that local stores have begun asking customers with out-of-state checks to show ID. Still, she adds, the police recently called to ask if her family dog was missing after one turned up that looked like it.

7. Los Angeles/Long Beach Area population: 8.3 million Three-bedroom house: $150,000 to $350,000 Property taxes: $1,500 to $3,500 Unemployment rate: 4.3% Average low temperature, January: 45 degrees Average high temperature, July: 76 degrees Robberies per 100,000 people: 594 Adults registered to vote: 58.5%

Residents of the 4,080-square-mile Los Angeles/Long Beach region have a wide choice of jobs. Half of California's economy is based in the 60-mile radius around Los Angeles, and last year nearly twice as many jobs were created there as in New York City. The arts sing. In fact, this metropolitan area tied for our highest score in the arts category. One reason: the number of art galleries has doubled in the '80s. Sports buffs have scores of choices, including the NBA champion Los Angeles Lakers and college favorites from USC and UCLA. Certain problems are inescapable. Earthquakes aside, smog is worse than ever -- some towns' ozone levels exceed federal health standards 140 days a year, the worst record in the nation. Bumper-to-bumper traffic remains pervasive. Gang warfare in L.A., popularized in the recent Dennis Hopper movie Colors, killed 205 last year. Another drawback is the spiraling cost of housing. After five years when prices were flat or down, house prices have bounced back some 50% since the spring of 1987, making the area's homes about twice as costly as the nation's median-priced house.

8. Orange County, Calif. Area population: 2.2 million Three-bedroom house: $170,000 to $260,000 Property taxes: $1,700 to $2,600 Unemployment rate: 2.9% Average low temperature, January: 45 degrees Average high temperature, July: 76 degrees Robberies per 100,000 people: 186 Adults registered to vote: 66.3%

Disneyland and its rival tourist attractions are just one segment of Orange County's thriving economy. Financial service companies, such as insurers, banks and real estate firms, fuel the engine. Experts say the 800-square-mile area ranks second in the U.S. behind Los Angeles in projected employment growth through 2010. Some of its most popular cities are Irvine, Newport Beach, Costa Mesa and Huntington Beach, though Anaheim remains best known. After work and on weekends, residents can tan along the 25 miles of coastline or enjoy a professional theater production at the highly acclaimed Orange County Performing Arts Center or the South Coast Repertory Theater. While homeowners and real estate speculators have prospered from the average 2% a month appreciation over the past 18 months, prospective buyers must struggle to find homes they can afford. As in Los Angeles, the county's major problem is traffic. During rush hours, cars creep along major roads at 20 mph. One solution: eliminate the commute. Last year, developers launched a mini- city of stores, public schools and offices called Rancho Santa Margarita. Houses cost between $90,000 and $200,000, as much as $30,000 below comparable ones elsewhere in the county. When it's completed in 20 years, more than half of the 40,000 to 50,000 residents may work there. Divisions of Hughes Aircraft and Unisys have already moved into the business park.

9. Boston Area population: 2.8 million Three-bedroom house: $185,000 to $305,000 Property taxes: $2,400 to $4,000 Unemployment rate: 2.5% Average low temperature, January: 23 degrees Average high temperature, July: 81 degrees Robberies per 100,000 people: 294 Adults registered to vote: 67.2%

High-quality hospitals, recreational facilities and antismoking laws make Boston one of the 10 healthiest U.S. cities, according to American Health magazine. Cultural, educational and outdoor activities also abound. Outdoor concerts attract thousands to the Boston Common and Great Woods, 40 miles to the south. Many residents join the area's 184,000 students in attending campus concerts, lectures and plays at the 30-odd colleges and universities. You can drive to Cape Cod in an hour to get away from city streets, or stand along Boston's streets to watch the world's oldest annual marathon. There's the usual high price for these attractions, however. Boston's cost of living is 57.6% above the U.S. average, according to the American Chamber of Commerce Researchers Association. The city is also burdened with the nation's dirtiest harbor; a $6 billion cleanup has just begun. To reduce congestion, the elevated Central Artery (official name: John F. Fitzgerald Expressway) is being converted to an underground highway, but the renovation will drag on through 1998. Drivers have more than just traffic to worry about: car thefts account for more than 28% of the city's reported crimes, the highest percentage of all U.S. cities with more than 500,000 people.

10. Bergen/Passaic counties, N.J. Area population: 1.3 million Three-bedroom house: $180,000 to $215,000 Property taxes: $2,400 to $3,000 Unemployment rate: 2.6% Average low temperature, January: 24 degrees Average high temperature, July: 86 degrees Robberies per 100,000 people: 171 Adults registered to vote: 67%

Northern New Jersey's population density is triple that of crowded Japan's -- for good reason. When New Yorkers feel the urge to move to suburbia, these two northeastern New Jersey counties are among the first places they consider. Heidi Holtz-Eakin and her husband Douglas moved to Teaneck (pop. 38,000) in 1985. ''We love it here,'' says Heidi. ''It's clean, integrated and has urban conveniences in a small-town atmosphere.'' Public schools in Bergen County are considered excellent. In mall-filled Paramus, for example, only 1% of high school students drop out, compared with the U.S. median of 23%, according to Charles Harrison, author of Public Schools USA (Williamson Publishing, $17.95). Bergen County house prices are out of reach for many first-time home buyers, though appreciation has flattened recently. Less chic Passaic, 10 to 15 miles farther from Manhattan, tends to be less expensive. For example, three-bedroom houses there cost roughly $180,000.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION:The top 300 places (compared with last year) DESCRIPTION: Top 300 U.S. cities to live in according to MONEY's criteria.