November 19, 2002: 6:23 AM EST
By Erica Garcia, Money Magazine

NEW YORK (MONEY Magazine) - Austin residents enjoy the best of both worlds: a stylish, exciting urban life, but without a lot of the hassles big cities are known for.

Even the heart of town is laid-back. Live music is one of the area's biggest draws, for residents and out-of-towners alike, especially in March when the South by Southwest festival brings thousands to hear cutting-edge music and see new films. Close to downtown, bordering the University of Texas campus, is historic Hyde Park, packed with colorfully painted Victorian houses; it's one of those rare city neighborhoods where parents are happy with public schools. As a result, Hyde Park has enjoyed an influx of young families who like to walk instead of drive, whether to the local park or the gelato parlor. Hyde Park's popularity has pushed home prices up to $300,000 or more. Farther south across the Colorado River, called Town Lake in these parts (dammed sections of the river get their own "lake" designation), lies another hot historic area, Travis Heights. Area landmarks include Zilker Park and Barton Springs, the local swimming hole, where a summer swim is an almost obligatory rite of Austin citizenship.

Ten minutes west of Austin on the south bank of the Colorado River is West Lake Hills, an affluent community with a rural feel and spectacular views, courtesy of the rolling Texas hill country, which offers a landscape quite distinct from the city plains. "I bought a view -- with a house attached," says Bernard Ortiz de Montellano, 64, a retired professor whose home overlooks Lake Austin (the Colorado River again). Here you'll find narrow, quiet streets and spacious homes. Residents -- with and without children -- brag about the Eanes school district, which was named "exemplary" by the Texas Education Agency.

For a more reasonably priced suburb, head about 15 miles north of Austin to Round Rock, which boasts large contemporary houses that run in the low $200,000s. Many of the town's newer developments include community tennis courts, swimming pools and clubhouses. The local public schools are known for their demanding standards. And if you're lucky enough to work for one of Round Rock's major employers, such as Dell Computer, you'd have a 10-minute commute.