(MONEY Magazine) – What a difference a year makes. Last year, in our second annual survey of the best places to live in the U.S.A., Danbury, Conn. headed the list. This time, mirroring the shift in strength of the nation's regional economies, top honors go to the breathtaking Pacific Northwest location on Puget Sound: Seattle. (The complete rankings of 300 U.S. metropolitan areas start on page 128.) The nearly 2 million people who live and work in the Seattle metropolitan area can tap into dozens of theaters and museums, professional sporting events and superb medical care. Fishermen, hikers and other outdoors enthusiasts note that few places rival the Emerald City, so named for the evergreens there and in the surrounding Cascade and Olympic mountains. Best of all, you can probably afford to buy a house there: a three-bedroom Tudor sells for around $130,000. Seattle's major concern is a direct by-product of its growing appeal -- overpopulation. Dr. Nasser Ordoubadi, the 33-year-old physician of nearby Kirkland featured on page 126, says with a smile: ''Some of my friends tell me not to say too many good things about Seattle.'' As MONEY did in 1987 and '88, we asked a representative sample of 251 of our subscribers -- whose median age was 41 and median household income $42,500 -- to rate regional characteristics on a scale of 10 (for most prized) down to 1. This year's top priorities were the availability of hospitals and doctors; last year's big concern -- a low crime rate -- faded. Once again subscribers also cited the likelihood of housing appreciation and the availability of affordable homes. We then gathered data from sources, ranging from the FBI to Better Homes & Gardens Real Estate Service, for the Census Bureau's largest U.S. metropolitan areas -- not just their dominant cities. A few places lacking essential statistics, such as house prices and the number of sunny days, were omitted, including Decatur, Ill., Naples, Fla. and fashionable Santa Fe, N.M. Next, points were awarded based on our proprietary formula of how the areas measured up against the factors in our poll. The final rankings were done with assistance from Bert Sperling, a researcher whose computer program helps transient Americans choose locations to live (Places USA, Fast Forward, P.O. Box 14706, Portland, Ore. 97214; $74.95). MONEY staffers and correspondents did firsthand reporting in the top 10 cities as well as in Las Vegas, the place that moved up the most notches from a year ago. The winners range from San Francisco, a perennial favorite (earthquakes notwithstanding), to fairly inexpensive spots rebounding from economic troubles -- Denver and Pittsburgh. Minneapolis/St. Paul rose from No. 33 to No. 9, thanks to its diverse economy that more than compensates for its Siberian winters. Despite some recent economic weakness, a few northeastern areas with first-rate medical care showed up strongly: Danbury, Central New Jersey, Boston and its nearby North Shore, and Nashua, N.H. The cities that dropped from last year's top 10 were divided between both coasts. Los Angeles/Long Beach (7 to 13) and Orange County, Calif. (8 to 23) slipped largely as a result of defense business cutbacks and rises in already exorbitant housing prices. In the East, Long Island, N.Y. (4 to 16), Norwalk, Conn. (3 to 18) and Bergen/Passaic, N.J. (10 to 28) suffered the economic aftershocks of the 1987 stock market crash. Most of the places at the bottom of our list scored poorly in health, arts, leisure and education. The unemployment rate is in double digits in Yuba City (14.6%) and Stockton, Calif. (10.2%) and is roughly 9% in Flint, Mich. In Atlantic City, where the mayor and 11 others were just arrested for allegedly taking bribes, the rate of reported property crime remains among the nation's highest. Rounding out this year's list at No. 300 is Benton Harbor, Mich., which was visited by MONEY reporter Elizabeth MacDonald. A Lake Michigan vacation spot in the '30s, the Benton Harbor metro area is really two places. In the economically depressed city of Benton Harbor (pop. 14,700), the unemployment rate hangs at roughly 35%. But nearby St. Joseph (pop. 9,600) is a model of suburbia that has held on to its businesses. Homes in St. Joe cost about $100,000, vs. $38,000 in Benton Harbor. Some Benton Harbor residents predict that a recent decision by Whirlpool, the area's biggest employer, to invest $5 million in redevelopment programs will help turn things around. ''Two years ago, I wouldn't have said Benton Harbor would come back,'' says Dirk Ficca, the pastor of the local First Presbyterian Church. ''But now there's a ferment out of which you're going to see some rapid change.''

1 Seattle Area population: 1.8 million Three-bedroom house: $100,000 to $140,000Property taxes: $1,300 to $1,900 ) Top tax rate on wages: None Top sales tax rate: 8.1% Semiprivate hospital room: $308 Robberies per 100,000 people: 204 Unemployment rate: 4.5% Annual sunny days: 136

Old-timers point to 50-story office towers that have radically altered the downtown cityscape and clogged street traffic, and mutter that Seattle has become a sorry place. Who should move to the Puget Sound region? No one, they insist. Too crowded for young families. Too expensive for retirees. Rains all the time. Don't believe it. The real Seattle offers relatively low housing costs, quality medical care, unparalleled scenic beauty, a cyclical economy now in full throttle and less annual rainfall than Miami. Word is spreading. Houses often sell the first day they are listed. Although competitive bidding boosts the list price of starter homes in the $90,000 range by $10,000, envious Californians know that comparable houses where they live command two or three times as much.

Record demand for new jets makes Boeing a dominant force in the local economy. But the area's burgeoning role in international trade has helped diversify Seattle. Transport ships leaving the city are a day closer to Pacific Rim countries than those departing most West Coast ports. More growth is on the way; a national survey of CEOs released in July calls Seattle the second best business location in America. There is a delightful variety of ways to live in Greater Seattle. A few souls dwell in houseboats on Lake Washington, east of the city. Medical professionals who work on ''Pill Hill,'' where city hospitals and clinics are clustered, often own houses in suburban Bellevue or Magnolia. Some 14,500 others enjoy Bainbridge Island in Puget Sound, a 30-minute, $3.30 ferry ride from downtown. No place is perfect, of course. Seattle has little violent crime but many reported burglaries. As for the legendary rains that make for long, gray winters, Seattleites rationalize that at least you don't shovel the raindrops. Bertha Fitzpatrick, who moved to tiny Woodinville from sun-drenched Irvine, Calif. three years ago, says: ''Yes, it rains. But this is the best place to live in the world on a sunny day.''

2 Danbury, Conn. Area population: 162,000 Three-bedroom house: $175,000 to $200,000 Property taxes: $2,100 to $2,400 Top tax rate on wages: None Top sales tax rate: 8% Semiprivate hospital room: $334 & Robberies per 100,000 people: 41 Unemployment rate: 2.7% Annual sunny days: 200

In the year since the New York City exurb of Danbury rated No. 1 in our 1988 survey: traffic improved (busy I-84 now has six lanes, up from four), community pride emerged (a volunteer campaign to improve three parks netted $10,000 in a month) and a downtown revival began (two gourmet restaurants opened and the town approved a redevelopment program). Nearly anyone looking for a high-paying job can still find one -- some supermarket baggers working on the Fourth of July pulled down $13.20 an hour. And despite a recent double homicide, the violent-crime rate remains roughly a seventh of the U.S. average. So why did Danbury slip to No. 2? In a word: taxes. While there is still no Connecticut income tax on wages -- not yet, say skeptics -- state legislators just raised the nation's highest state sales tax rate from 7.5% to 8%, and Connecticut now collects the tax on services such as landscaping. The pols squeezed investors too, bumping up the top state tax rate on interest and dividends two points to 14%. ''The tax changes encourage retirees to move to Florida,'' complains Charles Bliss, a C.P.A. with the local accounting firm Greenhaus Bliss Riordan.

3 San Francisco Area population: 1.6 million Three-bedroom house: $250,000 to $600,000 Property taxes: $2,700 to $6,500 Top tax rate on wages: 9.3% Top sales tax rate: 6.5% Semiprivate hospital room: $451 Robberies per 100,000 people: 355 Unemployment rate: 3.4% Annual sunny days: 265

Beneath San Francisco's picturesque veneer lie some plain old-fashioned strengths. It has the cleanest urban air in California: the region exceeded federal ozone standards only four days last year vs. 148 for Los Angeles. The mild climate, with winter temperatures that rarely dip below 40 degrees, tends to keep annual utility bills at less than $600. Total employment grew 2% over the past year as 14,300 jobs were created, mainly in the service sector. A strong Bay Area tourist industry offers great opportunities for entrepreneurs, particularly restaurateurs. Three nationally renowned chefs, including Spago's Wolfgang Puck, just opened bistros. The region's most serious detriment, ahead of a high crime rate, continues to be its stratospheric housing costs. The average San Francisco house price is triple the U.S. average. Cash-strapped families have lately headed 10 miles southwest to hillside suburbs like Pacifica, where a three-bedroom waterfront house costs about $250,000. Real estate agents see little chance that home prices will return to reality as long as San Francisco's attractions continue to capture hearts.

4 Denver Area population: 1.6 million Three-bedroom house: $70,000 to $110,000 Property taxes: $660 to $1,000 Top tax rate on wages: 5.5% Top sales tax rate: 7.2% Semiprivate hospital room: $296 Robberies per 100,000 people: 150 Unemployment rate: 6.1% Annual sunny days: 246

This metropolitan area, known for its snow-covered mountain peaks, continues to rocket ahead in our ratings, up from 76 last year and 187 in 1987. The surge reflects, at least in part, Denver's fame as a regional medical center. Another plus is transportation. If you can put up with unavoidable flight delays, it is possible to get practically anywhere from Denver's Stapleton International Airport -- which will be replaced by the world's largest airport in the mid-1990s. And on the ground, the commute to work is pretty painless. Twenty minutes from downtown, you can live in groomed suburbs surrounded by horse corrals and riding paths. The weather is also less threatening than you might expect. A January day could be 55 degrees and sunny, while skiers in Vail 98 miles west shiver in a 25 degrees snowstorm. Plunging oil prices wrecked Denver's economy in the early '80s. But in the past few years, Merrill Lynch, American Express and several major insurers opened back-office operations here, bringing in roughly 1,600 jobs. The area's first convention center and a million-square-foot shopping mall are expected to help cut the above-average unemployment rate by adding roughly 5,000 more jobs. The property-crime rate exceeds the national average by about 10%. But civic-minded Denverites are fighting back. When California youth gangs moved into the area last year, neighborhood coalitions and churches tried to repel them with job and recreational programs.

5 Nashua, N.H. Area population: 173,000 Three-bedroom house: $120,000 to $300,000 Property taxes: $1,600 to $3,900 Top tax rate on wages: None Top sales tax rate: None Semiprivate hospital room: $232 Robberies per 100,000 people: 19 Unemployment rate: 2.8% Annual sunny days: 197

% Two years ago, when Nashua's roaring high-tech economy epitomized Boomtown, U.S.A., MONEY ranked the suburban Boston area No. 1. Today, notes Norman Storrs, president of the Nashua Trust Co., ''We're adjusting to more normal times.'' The local economy is beginning to wheeze. For example, some owners of condos and luxury homes can't find buyers. Sanders, a major employer owned by Lockheed, recently laid off 7% of its Nashua work force, and there's talk of cuts at defense and computer firms. Many exceptional features endure, however. ''It'll be a long time before income or sales taxes are here,'' says Michael Valuk, executive director of the New Hampshire Association of Commerce and Industry. And the crime rate is still only half the U.S. average.

6 Boston Area population: 2.8 million Three-bedroom house: $170,000 to $350,000 Property taxes: $1,400 to $5,100 Top tax rate on wages: 5.375% Top sales tax rate: 5% Semiprivate hospital room: $353 Robberies per 100,000 people: 252 Unemployment rate: 3.3% Annual sunny days: 205

Boston edged up three notches in the rankings this year, reflecting MONEY readers' rising preoccupation with the availability of fine medical care. The city is home to some of the top teaching hospitals in the nation, such as Massachusetts General and Beth Israel, which are affiliated with Harvard Medical School. Few places have more doctors: 535 per 100,000 people. Signs abound, however, that the economy -- part of Governor Dukakis' touted Massachusetts Miracle -- is beginning to look more like Miracle Whip. For example, Wang Laboratories in Lowell recently laid off nearly 400 of its 8,700 local employees. The 3.3% unemployment rate is sure to rise, and a revenue- hungry Massachusetts Legislature also recently approved a ''temporary'' increase in the top state income tax rate, from 5% to 5.375%. In sum, short-term sniffles are afflicting a region that has long been healthy. So if you are considering moving here, this may be a time to snare a rare bargain on a house or condominium, before the plateaued -- though high -- prices start escalating again.

7 Boston's North Shore Area population: 260,000 Three-bedroom house: $130,000 to $350,000 Property taxes: $1,000 to $4,000 Top tax rate on wages: 5.375% Top sales tax rate: 5% Semiprivate hospital room: $353 Robberies per 100,000 people: 44 Unemployment rate: 3.5% Annual sunny days: 205

If Boston's bustle seems too stressful to you, add windswept Singing Beach, the bird watcher's paradise of Plum Island, and subtract the city's high auto- theft rate -- and you have a 50-mile stretch of coastline known by the Census Bureau as Salem-Gloucester but locally as the North Shore. From touristy Rockport to inland Middletown, the area's 16 municipalities serve mostly as bedroom communities for Boston. Commuting can take an hour or so, but rail service from Manchester is reliable. This summer the transit authority began providing free weekend transportation for commuters holding special passes. Wealthy shipping barons in the 19th century built the North Shore's stately federalist mansions. Later the houses passed to Boston Brahmins who prized the region as a summer retreat. Right now, the towering prices that have long been associated with houses here are teetering a bit. In mid-1989, the average house price dropped to $204,526, down 3.9% from the first quarter. ''A lot of properties have been sitting on the market a long time,'' says Harold Beaton, president of the Greater Salem Association of Realtors. Beaton foresees no change for the rest of the year. North Shore residents include many of Boston's business elite, such as Fidelity's famous Magellan Fund manager, Peter Lynch, of coastal Marblehead. Many of the locals like the public schools, which tend to be somewhat less innovative than ones in Boston's affluent western suburbs but far less troubled than those of Chelsea and other poor, urban neighborhoods.

8 Central New Jersey Area population: 990,000 Three-bedroom house: $155,000 to $300,000 Property taxes: $2,100 to $3,500 Top tax rate on wages: 3.5% Top sales tax rate: 6% Semiprivate hospital room: $260 Robberies per 100,000 people: 65 Unemployment rate: 2.1% Annual sunny days: 216

You could call the once horsy region of New Jersey's Middlesex, Somerset and Hunterdon counties an economically fertile crescent. Jobs grew by 3.5% last year. The area also earns high marks for being near the theaters and museums of New York City and looks forward to the 1992 completion of the New Brunswick Cultural Center, which will be home to the Princeton Ballet and the nationally acclaimed Crossroads Theatre. But Central New Jersey's popularity is taking a toll. For example, the 114,000 residents of Hunterdon County -- across the Delaware River from Pennsylvania's Bucks County -- seem to be losing their battle to preserve the local rustic charm. New Jerseyans from more congested communities have moved in to scoop up housing bargains like four-bedroom colonials at $230,000. Another flood of humanity will arrive in 1992 when Merck, the pharmaceutical company, moves as many as 1,800 people to its new headquarters in Readington Township.

9 Minneapolis/St. Paul Area population: 2.4 million Three-bedroom house: $80,000 to $200,000 Property taxes: $900 to $3,000 Top tax rate on wages: 8.5% Top sales tax rate: 6.5% Semiprivate hospital room: $292 Robberies per 100,000 people: 164 Unemployment rate: 4.4% Annual sunny days: 200

No huzzahs about the Twin Cities could persuade you to settle in the area if the thought of shoveling four feet of snow each winter makes your back ache. But for those who prefer true four-season weather, Minneapolis/St. Paul offers a diverting and economical way of life. New arrivals may get an even frostier reception than they imagined, though. Eve Mykytyn, 30, who moved to Minneapolis from New York City last October, says: ''The people are friendly. But many were raised here and stick closely to the crowd they've grown up with.'' Although the Twin Cities are separated only by the Mississippi River, the two places are as different as Prince (a native of Minneapolis) and Garrison Keillor (of St. Paul). Residents of bigger, cosmopolitan Minneapolis (pop. 356,000) see their city as uncommonly hip. Teenagers hang out in the rock 'n' roll clubs and vintage clothing stores in the Warehouse District, while their parents dine at power bistros, take in a play at the Guthrie or hunt for parking spaces outside the jammed six-month-old Polo Ralph Lauren boutique. Life has more small-town conviviality in ethnically diverse St. Paul (pop. 265,000). One of every four children entering St. Paul's kindergartens this year will be Asian-American. Playing or at least watching all kinds of sports is practically mandatory here. This fall, when the new Minnesota Timberwolves join the NBA, the club will round out the area's pro sports franchises of the football Vikings, baseball Twins and hockey North Stars. And if you like living near colleges, the campuses of 21 schools including the University of Minnesota will surely please. But the public school system's open-enrollment option, which is available in some districts, is controversial. Although Minneapolis kids can apply to any public school in the city, they cannot always get into programs they desire and must sometimes attend classes far from home. Few metropolitan areas offer a wider variety of house prices and property taxes. Consequently, some Minneapolis residents have been moving about 20 miles away to less expensive and less crowded hilly suburbs such as Eagan, where you can get a four-bedroom house with a duck pond for $200,000. Property taxes: $2,000. The same size house in Minneapolis proper could set you back $400,000, plus $4,800 in taxes.

10 Pittsburgh Area population: 2.1 million Three-bedroom house: $80,000 to $115,000 Property taxes: $1,000 to $2,200 Top tax rate on wages: 2.1% Top sales tax rate: 6% Semiprivate hospital room: $342 Robberies per 100,000 people: 152 Unemployment rate: 4.4% Annual sunny days: 161

To understand Pittsburgh's renaissance, flash back to 1983. At that time, it was still Steel City -- but just barely, with an unemployment rate of 15.7%. Moving vans drove in only one direction: out of town. Today, though, the southwestern Pennsylvania metropolitan area has begun to swell with transferees working in biotech, banking and computer software companies. The continued shrinking of the local steel industry has had the pleasant effect of helping to improve air quality. And despite the obvious signs of corporate growth, area residents say their community has managed to retain its friendly feel. ''You won't get lost in a big-city shuffle here,'' says Melissa McNallen, a 28-year-old women's clothing store administrator. Manageable day-to-day living costs make the area seem more midwestern than eastern. The average doctor's visit costs $27, vs. $41 on Long Island, according to the American Chamber of Commerce Researchers Association. Housing is quite reasonable. Few other northeastern cities feature homes for less than $200,000. Current hot markets are in the North Hills suburbs such as Franklin Park and Sewickley; South Fayette and Moon Townships near the airport; and Peters Township in Washington County, half an hour from Pittsburgh. Andrew Carnegie (pronounced car-nay-gie by locals) created a home for arts and education in Pittsburgh's Oakland section, about four miles east of downtown. The Carnegie Music Hall, public library, and museums of art and natural history are housed under one roof. The University of Pittsburgh is across the street. Duquesne University and 28 other colleges are scattered throughout the region, making it a premier academic center.