No. 1: Houston, Texas

By Jane Bennett Clark, Senior Associate Editor, Kiplinger's Personal Finance

July 2008

COMEBACK KID

Population: 5,542,048
Population Growth Since 2000: 14.9%
Percentage of Workforce in Creative Class: 31.3%
Cost-of-Living Index: 88.1 (100 being national average)
Median Household Income: $50,250
Income Growth Since 2000: 13.1%

It's the city of big plans and no rules, beat-the-heat tunnels and loop-the-loop highways, world-class museums and wiry cowboys, humidity that demands an ice-cold martini and the biggest damn liquor store on the planet. How could you not love Houston?

VIDEO EXTRA:
	Take Our Walking Tour Through Houston

You can hardly afford not to. Back with a roar after the oil bust of the 1980s, Houston has reclaimed its title as energy capital of the U.S. and added aerospace, technology and medical companies to the mix, generating more than 100,000 jobs in 2007. Not only does the Houston metro area lead the nation in job growth, but also its cost of living stands well below the national average. Housing prices run half those of other metro areas its size.

Houston's comeback didn't happen by accident. "Before the energy business returned, the city made the wise decision to invest in its downtown," says Guy Hagstette, who directs Discovery Green, a new 12-acre park in central Houston. Upgrades include an expanded convention center, a new stadium, a spiffed-up Main Street and a light-rail system.

Those improvements attracted couples and empty nesters, as well as Fortune 500 companies. Laura Van Ness, business director of Central Houston Inc., exchanged her 4,400-square-foot suburban house a few years ago for a condo within shouting distance of Houston's museums, theaters, sports venues and restaurants (and Spec's, the world's largest liquor store). She walks to work -- ducking into the pedestrian tunnels on steamy days -- and comes home to a building with a rooftop pool and spectacular views of the skyline. She could cook, but she doesn't. "When I have a party, I take my platter to the Four Seasons Hotel and have them put appetizers on it."

If dinner on a skewer isn't your style, you could settle in Sugar Land, a fast-growing, family-friendly suburb 20 miles southwest of the city. Sugar Land's penchant for planning borders on the prissy compared with Houston's chaotic energy. But for many, that's the appeal. Attractions include solid schools, a strong local economy and an affluent population (average household income is $133,354, more than twice the national average).

As for housing, Sugar Land defines itself by its master-planned communities, each of which mixes homes, retail and recreation. Houses are affordable: $350,000 will buy you a four-bedroom, two-bath home in the attractive Commonwealth development. Socializing revolves around each community's tennis courts, golf course, pool and clubhouse. "Sugar Land is exactly as it sounds," says Theresa Worsham, who lives in the Sugar Creek community with her husband and two sons. "It's a sweet lifestyle."

NEXT: No. 2 Raleigh

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