By Kurt Badenhausen, Forbes.com

Nov. 29, 2007

Three out of 10 of us either work in an educational institution or learn in one. Education eats up 8 percent of the Gross National Product. Keeping it all going is the biggest line item on city budgets. Whether the results are worth it sometimes makes teachers and parents - and administrators and politicians - raise their voices and point fingers.

In the 1930s, the United States was fragmented into 130,000 school districts. After decades of consolidation, there are now fewer than 15,000. They range in size from hundreds that don’t actually operate schools - but bus children to other districts - to giants like the Los Angeles Unified District, with three-quarters of a million students.

Greater Chicago has 332 public school districts and 589 private schools within its eight counties. Metropolitan Los Angeles takes in 35 public library systems. Greater Denver counts 15 public and private colleges and universities. Moving into any of America’s metro areas means stepping into a thicket of school districts, library systems, private school options and public and private college and universities.

In Pictures: Top 20 Places to Educate Your Child

Let’s agree with wise experts that the quality of education any child gets comes down to just three things: their own motivation, their parents’ support, and good teachers. Still, is there a way to compare America’s metro areas for education strengths? Consider five factors.

1. School Support

One of the Department of Education’s most popular Web sites is Build a Table. Here, you can collect data on anything from public school finances and teachers to high school graduation rates for any place you wish - the country, states, counties, metro areas, and districts.

Using the department’s data, which come from each of the states, you can combine the metro area’s average number of students per full-time equivalent classroom teacher (the lower the better) with its average instructional expense figure for student (the higher the better) to produce some interesting winners: Ocean City, N.J., Ithaca, N.Y., and Honolulu.

2. Private School Options

Today, one in nine children attends a private school. Catholic schools are the private-school alternative with the biggest enrollment (2.5 million pupils).

Although half of all private-school pupils sit in Catholic school classrooms, two of every three private schools are non-Catholic. Some 1.7 million pupils attend schools run by groups such as the Evangelical Lutheran Church, the Seventh-Day Adventist Board of Education and the National Society for Hebrew Day Schools. Nonsectarian schools enroll another 800,000 pupils, most of whom pay tuition to institutions belonging to the National Association of Independent Schools.

Yes, you can find a private school at another Department of Education site - and yes, you can rate each metro area’s options for private school options. Winners in this category are Washington, D.C., Houston and Atlanta.

3. Library Popularity

At a bank of Internet terminals at a public library’s main branch, you may see a cab driver researching family genealogy on your left, a high school senior investigating jobs with the airlines on your right. Behind you, a stack of Mexico City newspapers wait on a re-shelving cart. And in front, an acre of tables is piled with briefcases and book bags where people sit reading. More than any other metro-area educational institution, libraries are the vital center and ultimate education resource for everyone.

If librarians had to choose one measurement of success, it would be turnover rate. Calculated by dividing the library’s circulation by its number of books, turnover shows the activity of the library’s collection - indicating the number of times each book would have circulated during the year if circulation had been spread evenly throughout the collection.

A library system emphasizing best-seller circulation will have higher turnover than a library system that has an extensive reference collection, or frankly, a library system that is open fewer hours and has books no one likes to read.

Among metro areas, the perennial winners in library turnover are all out West: Portland, Ore., San Jose, Calif., Colorado Springs, Colo., and Salt Lake

4. College Town

Colleges and universities are great white-collar employers. In fact, there is a big connection between research-oriented universities and healthy economies. Two historic examples are Stanford University’s boost to the growth of Silicon Valley high-tech enterprises in San Jose and the Bay Area, and MIT’s faculty and alumni, who started electronics firms along Route 128 outside Boston.

Any place can be a college town if it has at least one institution of higher education.But if you weight each person attending local colleges by the number of years needed to get the highest degree offered (that is, associate of arts enrollment is weighted by two, bachelor degree enrollment by four, master’s degree enrollment by six and doctoral enrollment by nine), you come up with a wide range of numbers.

Places like College Station-Bryan, Texas; Iowa City, Iowa; Lawrence, Kan.; and Columbia, Mo., come out very high on this criterion. Alas, there’s only one game in town in Ames, Iowa (Iowa State University), in College Station-Bryan (Texas A&M), in Lawrence (University of Kansas) and in Columbia (University of Missouri). Something else is needed to reward higher-education variety.

5. College Options

A metro area’s collection of higher-education institutions should meet the needs of the greatest number of residents: low-cost night and weekend continuing-education courses for people who work, full-time graduate courses in the professions, courses leading to occupational certification in two-year colleges and the traditional bachelor’s degree curriculum offered in colleges or universities. Here, the top-ranking places are one, two and three in size: New York, Chicago, and Los Angeles.

Combining all these criteria gives us the rankings of the top places in America to educate your children - led by Washington, D.C.-Arlington, Va., and followed closely by Madison, Wis., and Cambridge-Newton-Framingham, Mass.

David Savageau, contributing editor for Expansion Management , is the author of the best-selling Retirement Places Rated and www.placesrated.com.

By Matt Woolsey, Forbes.com

Dec. 7, 2007

While gambles on up-and-coming neighborhoods and new developments paid off for many real estate investors during the boom, housing markets across the country are now awash with unsold condos and suffering from sluggish sales.

But this is not the case for homeowners in so-called “blue-chip” neighborhoods. Properties in these well-established spots have held on to and increased in value over the past 17 years. They include segments of Pacific Palisades in Los Angeles, areas of Chicago and parts of University Park in Dallas. In these spots, the median home sale price has grown, in that time, by 440 percent, 236 percent and 148 percent, respectively.

In search of these and other “blue chips,” Forbes.com looked at home appreciation data from NeighborhoodScout.com, a Rhode Island-based real estate research firm that tracks these numbers at the Census-tract level. It revealed the spots in the country’s 15 largest metros that show the greatest total historical appreciation since 1990. After all, a truly robust market can weather market downturns and grow during market spikes, no matter how many cycles it goes through.

Complete List: America’s Blue Neighborhoods

We constrained our data set in two ways. Neighborhoods had to post prices in the city’s median range or above in 1990, and the majority of homes in the neighborhood had to be built before 1990. Otherwise, the list would be filled with two kinds of false positives: areas infiltrated with the abandoned-warehouse-turned-high-rise, where property values easily might have shot up 2,000 percent, but where none of these homes really appreciated, and those filled with new construction.

While good for urban renewal, new construction doesn’t indicate areas are becoming more valuable, just that expensive homes are parachuting in. A true blue-chip neighborhood is of high quality and stands the test of time, regardless of how much new construction or re-zoning the government leverages as incentive for builders.

NeighborhoodScout.com aggregates its data on the Census-tract level, which are, effectively, neighborhoods as defined by the Census Bureau. ZIP codes, another common method of measurement, are defined based on mail delivery efficiency, and thus often cut across very different neighborhoods. The Census-defined neighborhood is purely geographical, which makes the data more precise.

Behind The Numbers

In some cases, our blue-chip picks encompass a city’s priciest area. This was the case with New York, where a swathe of the Upper East Side, in the East 70s, was found valuable in 1990 and has appreciated by 325 percent since then. Of course, stability and strong, consistent growth gets cooked into the neighborhood’s $2.45 million median home price tag.

None of the neighborhoods on our list are particularly cheap. Even by California standards, the Sea Cliff area of San Francisco and Pacific Palisades in Los Angeles command top dollar, drawing median rates of $2.2 million and $3.1 million, respectively.

Still, in some places, the strongest-growing parts of town were middle- or upper-middle-class areas that were a good value in 1990, have exploded in value since, and are presently proving they can withstand the downward draft.

Good examples? Laurelhurst in Seattle and the Brickell Avenue/13th Street area of Miami. Neither neighborhood can be called the most expensive part of town, but both have been strong and steady gainers, appreciating 216 percent and 471 percent respectively since 1990.

Another consideration for some blue-chip areas: the range of housing prices. In the Embassy Row section of Washington, D.C., there’s little available much below the $2.84 million median price. But head to the Walnut Street and Third Street section of Philadelphia, and you’ll find townhouses listing above $2 million - but you’ll also notice that about 30 percent of the homes for sale are available for between $340,000 and $670,000. It goes to show that, while the homes are smaller, and are often apartments, they represent affordable buying opportunities in many blue-chip neighborhoods.

The prices are high, but you get what you pay for - especially when it comes time to hang out the “For Sale” sign.

By Matt Woolsey, Forbes.com

Nov. 29, 2007

Now that Alex Rodriguez has agreed to a new $275 million contract with the New York Yankees, the word in Manhattan real-estate circles is that a $39 million East 80th Street townhouse may be in his future.

Any deal this year would be the country’s sixth most expensive home sale of 2007. All of the top five have been in Manhattan.

It’s been that kind of year for the luxury sector in New York. While home prices slid around the country, Manhattan set a new apartment sales record with developer Harry Macklowe’s $60 million purchase of an entire Plaza Hotel floor (minus one rogue apartment), and a new price-per-square-foot benchmark ($6,287 per interior square foot) with former Citigroup chairman Sanford Weill’s $42.4 million splash into 15 Central Park West.

In Pictures: 10 Priciest U.S. Home Sales of 2007

“It’s a record, and we’ll see how long it lasts,” says Gregory Heym, chief economist at Brown Harris Stevens, a New York-based real-estate brokerage. “Even with all the development going on, there aren’t a lot of Plazas and 15 Central Park Wests out there.” Heym adds that, in a couple years, it might look like Macklowe “got it for cheap.”

Behind The Numbers

We compiled our annual list of the most expensive U.S. home sales by tracking media reports, talking to real-estate brokers and consultants around the country and examining public property records. Prices come from published reports and brokers in the know. There are no doubt deals that would have made our list but were kept under wraps as many high-value sales are privately shopped and executed.

Our list did not include land sales, like financier Ronald Baron’s $103 million May buy of an East Hampton lot from Schlumberger heiress Alexis de Menil-Carpenter, or properties in escrow, like the $65 million Belvedere, Calif., estate overlooking the San Francisco Bay that is one of the most expensive homes in the West. What’s more, though the Forbes family’s approximately 171,400-acre Trinchera Ranch in Colorado, which was sold this month for $175 million to Louis Bacon, head of Moore Capital Management, was used as an executive retreat, for our purposes, it’s considered a land purchase. All would have been the most expensive home sold in the country this year.

Big Buys

New York City dominated the list with whales of Wall Street and the mayor himself signing eight-figure purchase contracts. The first non-Gotham property to make the list was hedge fund manager Bruce Kovner’s $35 million Mediterranean-style villa, overlooking the ocean in Carpinteria, Calif., outside Santa Barbara. To be fair, it comes as part of a bundled deal. Kovner accumulated $83.5 million worth of property in Carpinteria this year, adding 15 acres of land perched on bluffs overlooking the water. Because they are not contiguous, and Kovner hasn’t said anything about combining them, we counted them as separate sales.

Though Tom Cruise’s purchase of a $32.5 million Beverly Hills mansion cracked the top 10, celebrities generally are not the ones sitting on the buyer’s side of the table at closing. Movie stars collect big checks for films, but once prices top $30 million, buyers tend to be those who can afford to write the kind of checks movie stars hope to receive.

That kind of wealth is heavily concentrated on Wall Street. Even though it’s been a rough year for the banks, and write-downs related to mortgage-backed securities have wrought havoc on balance sheets, the big money spigot is still flowing to top executives.

“The five largest firms are going to pay more in bonuses than they did last year, and even if bonuses go down by 15 percent in total, as some people have suggested, they’d still be the second highest on record,” says Heym.

Economists often debate how much bonus money makes it into the real-estate market, but Heym says the money on hand right now is more than sufficient to fuel higher prices in the upper luxury sector. “Buyers can put the money down and pay in cash, or they might want to finance part of the sale to do other things with the money,” says Heym. “For most of the people, it’s not their first bonus.”

Astronomical Assets

Prices in the top sector are not affected by general market trends because, quite simply, they exist outside the general market.

“In the high-end market, it’s all about wealth and a lack of property,” says Mauricio Umansky, a broker with Hilton & Hyland in Southern California. “A lot of people want to be in Los Angeles, people want to be Malibu, Aspen and New York … there are trophy properties out there and enough billionaires out there that want to buy a trophy property.”

Because all the buyers have multiple homes and often use trophy properties infrequently, it probably makes more sense to think of these properties in the same way experts speak of valuations in the high-end art market. Unique properties - like irreplaceable paintings - trade rarely. Valuing the penthouse at the Plaza can be as difficult as appraising a Picasso.

“If it’s an outlier, the valuation, and getting your arms around the value is difficult because there aren’t any true comparables,” says Jonathan Miller, director of research at Radar Logic, a New York real-estate analytics firm. “We’re still looking at the fundamentals and property characteristics, and understanding how a property fits within a market. Chances are you may have had other properties further back in time and you can extrapolate.”

Like the luxury real-estate market, it was a banner year for the art market. David Geffen, for example, sold a Jackson Pollack for $143.5 million and a Jasper Johns for $80 million; Christie’s moved $395 million and Sotheby’s sold $270 million of art in November shows. While the hedge-fund millionaire’s cash fuels both luxury markets, how much longer it can last is a question that haunts the Street.

Still, when it comes to America’s most expensive properties, the slumping dollar should buoy sales for the foreseeable future.

“The one benefit to the credit crisis and a slowing economy is that the dollar isn’t going to get stronger against these other currencies,” says Heym. “Foreign buyers are essentially getting huge discounts.”