Money Magazine: How to Pick the Best Place to Live

Money Magazine ranks several important factors in picking the "best place to live" within a particular metropolitan area. For example, if you are buying in San Diego, what part of SD would be the best investment?

Here are some things to consider.

Proximity to the city. When home values were soaring, many buyers could afford houses only in the exurbs. But grueling commutes and high gas bills are a drag - which helps explain why prices of homes more than 40 miles outside city centers have generally dropped the most, says Ken Shuman of real estate site Trulia.com. Take this example in the Bay area: homes in Antioch (45 miles from San Francisco) fell 37% in the past 12 months; those in Walnut Creek (25 miles away) fell 18%.

Great schools. Parents will do just about anything to enhance Junior's college prospects. That's why home prices in towns with excellent public schools generally hold up best during downturns, according to a 2008 Trulia.com study - and why you should favor them even if you have no rugrats of your own.

Strict limits on new construction. Towns where zoning regulations made it tough to build have seen much smaller price drops than towns that had huge building booms in recent years. "Prices are more likely to go higher if you can't expand supply," explains Daniel McCue, research analyst at the Harvard University Joint Center for Housing Studies. Another good sign: The town nestles against a barrier, such as a large lake or protected wetland, that limits expansion.

Plenty of commerce. Towns with stores, banks, and movie theaters - plus some large white-collar employers - are a better bet than those that are nearly all residential. People like to live near these services and jobs, and they give a town a stronger tax base to fund things like police and snowplows.

Lots of flower boxes. And manicured lawns, carefully tended parks, and well-maintained streets. "The value of one house depends on the surrounding neighborhood and properties," explains Wheaton. Conversely, towns with overgrown parks and noticeably vacant homes generally aren't great bets.

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