If you still want lawn in that area, but don't want the maintenance of a lawn you could install Fieldturf. It gives the look of lawn, but you never have to mow. Here's some info if you want to check it out: http://www.rycolandscaping.com/resources/fieldturf-brochures

I would really like to get rid of the lawn and get a little more maintainence free. We have concrete on the drivewaywith tiled concrete path up to the front door. Would we concrete the grassed area or buy large patio tiles down?

This picture has more space than you have, but this is what I was thinking of when I suggested the planter box.

It's a lot of work, but you could make your yard one height, add an arbor like the background of my second suggested picture, then you'd have privacy from your neighbor up the hill too.

Hi Gail

Wow, you could do so much with this space! Concrete pavers might be a great choice for you. Pavers come in so many beautiful colors and patterns, and they are long-lasting. Depending on how much privacy you create and how much space you have, you could add a water feature, an outdoor kitchen or fire feature, outdoor pizza over, planter boxes, or a beautiful seating area like reom10 photos show. Here are a couple of shots of how beauitful pavers can be. Also, with pavers- if one day long in the future you had a problem with one paver, it is far easier to replace than say, a concrete slab.

If you want to do some research on pavers, you can check out our "DIY paver tips" free guide here : http://info.basalite.com/diy-paver-project-tips-and-tricks.

Even if you are not doing the project yourself, I think you'll still find the info helpful1

Happy Building!

You have done a beautiful job of tucking plants into the crevices of your retaining walls. Your house trim color is perfect -- just slightly lighter in hue than the retaining wall blocks.
First I would paint the big, flat gray wall slightly lighter than the blocks and slightly darker than the house trim. The concrete walk and stairs I would stain a mottled blend of the blocks and the house trim colors. Next would be to paint the railing black or the house body color.
Now, think of the following as creating a light, airy trellise structure from the walk-level face of the (currently gray) wall to about 7' above the top of the wall (using 6x6" posts attached to the wall) with a corresponding line of posts sunk into the terrace level 2' in from the outside edge of the wall-attached posts. The inside posts would be about 6-8" higher than the outside posts. Put 4x4" wood to attach the outside line of posts to each other and do the same with the inside line of posts. Run wood pieces at the top of the two lines of posts from the inside line to the outside line at about a 45 degree angle. They would be cantilevered up at the terrace level. Across the top of the angled pieces create your top trellise boards which run parallel to the two lines of posts. OK. There you have your basic structure. You might want to extend the structure around to follow the street side of the terrace.
You could then follow the suggestion of reom10 above about creating a bench-planter on the terrace side. Your spacing of the boards parallel to the gray wall and attached to the outside posts would determine how private you wanted your terrace to be.
You might want to soften the terrace "floor" by using something irregular like flagstone with groundcover plantings between the stones. From the latticework on top of your structure you could hang seasonal flower baskets. Plant vines to go up the trellis and spill down the wall.
How about planting a row of tall, narrow shrubs along the neighbor's fence above your terrace to help add to your privacy and make your yard feel less 'structured'? Or, how about patio table/s with umbrellas to block your neighbor's view?
Anyway, you have a fun project ahead of you.

Another idea for the deck is to use grass or dwarf mondo grass strips to create a geometric pattern in the hardscape. This way you're not overwhelmed by hardscaping but also don't have to deal with as much maintenance. Drip irrigation is a great alternative to spray head irrigation, that way you are only watering the decorative grass strips. Another idea would be to use Mexican beach pebble or crushed granite in lieu of grass strips. I would probably suggest gray concrete to complement your existing hardscaping or else a straight cut stone pattern. Either way, I think a square or rectangular pattern would look nice.