He’s not a super close neighbor, he's at the end of the street close to the larger north/south road. The way he talks about her, it seems he didn't know her to recognize it was her, he just made the connection after she came up missing. In the article, it says:
Source:
Neighbor offers new testimony about the night Mollie Tibbetts disappeared
It seems that she was walking east on W. Des Moines Street and then turned either left or right on 398. Blue arrow would take her past his house, then
if she turned left where the green arrow is pointing, that would take her in the direction of her mom's house.
View attachment 140222
The article just says "Wednesday evening," no time given.