It is a continuation of his previous work, Teru Teru Bouzu. Semi related is also Kasanaru.
[Spoilers] In TTB the demented dad raped and killed his daughter then hung her remains in a white cloth. Her teacher went to check on her and was imprisoned. This here continues with the fate of said teacher. She escaped only to be caught by the neighbour who got all jealous seeing the action next door. Also she seems to have lost her mind what with seeing little red sacks with blood everywhere and running away from a seemingly empty house. That or creepy shit. In short, what a swell neighbourhood.