So I finally found out what happened! My neighbor guys buddy came by to get his stuff and approached us to see if neighbor lady had been there. We stayed out of it, and just said we really haven't noticed much activity. He told us, we didn't even have to ask, that she was cheating on him and when he found out he went and beat up the other guy. It seems he really really really beat this other guy, not just a simple punch in the face, which is why the cops were hunting him down. They did catch him and he has been in jail.
And...the house and car are in his name, and the guy friend said she stole the car and most of the stuff in the house, including valuable things that were his. So I'm guessing that's why she was hiding her face, either because she's embarrassed she was cheating and/or because she wasn't suppose to be there taking his stuff.
So mystery solved. Good work gumshoes!