Learn Russian: Соседи идут в магазин. - The neighbors are going to the store.

Сосед (neighbor) is a masculine word ending in a hard consonant. Normally, it would take -ы to become plural, but this is a common irregular noun that takes the soft ending -и instead, making it соседи.

Why use идут instead of ходят for 'are going'?

Идут is from the verb идти, which means going on foot in one specific direction at this very moment. Because the neighbors are currently on their way to the store right now, we use идут. If they went to the store regularly as a habit, we would use ходят.

Why is магазин in its dictionary form if they are going to it?

When you talk about moving toward a destination, you use the preposition в plus the accusative case. For masculine inanimate nouns like магазин (store), the accusative case form is exactly the same as the dictionary (nominative) form, so it looks like it didn't change.

How do you pronounce в магазин? Do you pause between the words?

No, in spoken Russian, short prepositions like в attach directly to the beginning of the next word. You pronounce it together with магазин as if it were a single word without any pause: вмагазин.