I am hoping to find some ideas for our backyard. I have attached pictures. As you can see, we have a very steep slope in our backyard. We just built a new home (as you can see by all the construction equipment still there!) and the house sits lower than our neighbors propety.

We "roughly" graded the property thinking that we would do a few terraces, but I am not really happy with it. We are planning to have someone come in and regrade but I am not sure what to do. The side between us and our neighbor is so extreme. Should we put a boulder retaining wall there or just grade it down - but then do we lose the flat part? Or should we put up a fence just on that side so we can't see how much higher their yard is? I feel like I am living in a hole. Anybody have any ideas on what to do with this backyard. We have 3 small children and I would like to get some flat yard area for them to play.