I live in an area outside of Grand Rapids that used to be country and now has had several plats built up around us. Our lot is real long and narrow, only about 100' wide but 1000' deep. The lots next to and behind me are the same way. So behind us is a gully and woods. We have seen wild turkeys, ground hogs, skunks, deer, raccoons, rabbits, ducks try to settle in on our pool cover each spring, hawks, black squirrels as of about 5 years ago, never before that in 39 years we've lived here, and Pete saw a coyote a year ago fall.
On the news, they are hollaring about hearing a wolf about an hour drive from here. It keeps them awake at night.
As for your neighbor, tough. I would politely listen while thinking, "Tough!!" and say, "Oh."