It's really unfortunate you have to deal with this, and no you are not overreacting. So many kids are not taught any respect for others property and it's amazing how many kids have no regard whatsoever for animals. I would fear for my pets as long as neighborhood kids have access to your yard. Secure fencing, and locks, though it will cost some, are the only way to really secure your property. I'm really a proponant of a few nice tingley strands of hot wire as well! They just give an unpleasant zap, they don't hurt the kid. We had terrible problems with stray dogs, stray cats as well as stray people (!) on our property untill we finally put up a secure fence and turned a couple dogs loose inside.
Yeah, it was expensive but the problem does not exist anymore so it was well worth it.
BTW, how did your husbands talk with the parents go?