For example, demand and absorption are going to be much higher in urban core areas when compared to more rural areas. 

Then there's factors such as absorption rates / DOM in your neighborhood.

Absorption rate is up from .6 last year to 1.5-2 now.

@Chris Davidson the 6 months of inventory is based on inventory and the absorption rate of that inventory.So, it should adjust automatically as you've written.

The following is a very cursory list of how I would approach this.1) Work with a real estate agent to do thorough research on sales prices (comps) for similar properties in the area.2) Work with an experienced RE consultant or developer to create a pro-forma based on solid research for your development that includes 1) a pre-development and development budget that includes a) soft costs like architect and engineer fees, geotech, permits, survey, builders risk insurance, legal, etc. and b) hard costs (construction costs); 2) sources and uses of funds; 3) cash flows; 4) sales (absorption) projections; and 5) a capital accumulation model for your different development scenarios to help determine which alternative would yield the highest investment return.3) Find a reputable architect and engineer to create drawings and help you through the permitting process.4) Submit drawings to GCs for bid.5) Update your pro-forma for the estimated construction costs and take it to several lenders to determine what the loan terms would be.6) Secure a loan, hire a GC, and start building.Again, the above is just a simple general overview and is not meant to be comprehensive by any means. 

Pick an area you knowCommutable to you (under 90 mins typically)Good multi inventory to expand your portfolio Strong absorption rate for rentals Increasing population and development Tenant class has to fit your risk tolerance (i.e C class is high cash flow and more demanding management while A is low cash flow and solid tenants) Attleboro is a good market, Framingham, Lowell - all of those area good markets with strong inventory and reasonable purchase prices. 

I like that.Current inventory, absorption rate,average list to sale ratio price.Trends, Market direction, Good deals.Yes I would use it frequently.

What's the absorption rate?

If 3-4 units are an option for you, I'd definitely explore those as well.A couple of metrics I'd recommend looking into are:- Average days on market (DOM) - to get a sense of which local submarkets are slowing down and may give you some wiggle room on negotiations- Absorption rate - how much inventory exists in a particular market.

Cork flooring has good sound absorption too.