Use this phrase to talk about things that you don't know for sure, but you think are true based on evidence that you see or hear. For example, you can talk about changes to the economy this way:

The unemployment situation seems to be getting worse.

You don't know if this is true or not; you're just guessing because you've talked to several people who have gotten laid off recently.

In the example at top, the speaker says that her neighbor "seems to be" having construction done because she hasn't seen anyone working or spoken with the guy who lives there. She's just guessing based on the noises she hears.