I think it's really hard with family members. If your extended family is like mine, the amount of drama between everyone is really unbelievable and difficult to wade through.

I'm sorry that you went through this though. I get talked over a lot too, even at work, and it makes me feel like people just don't care or value what I have to say. I've tried to be more assertive (so in your case, saying something like: "Excuse me, I've got this!" though I've seen some people say things like, "I wasn't finished!" (i.e. talking)) - but I haven't had much luck with that, as I'm not great at bursting in when others are talking, even when they do it to me.

Maybe the best thing to would have been to either hang around until he stopped talking, then pick up your conversation with the neighbor (you could always start with, "As I was saying...") or try to catch up with your neighbor later when your relative isn't around (assuming you want to be friendly with them).

Just some thoughts... I wish I had better suggestions!