SANTA BARBARA, CA—For those wondering whether multifamily's growth will be sustainable, Yardi Matrix sees plenty of reason for bullishness. The sector is being buoyed by a series of tailwinds, including report an improving national economy, above-trend household formations by the Millennial generation and the movement of Baby Boomers into urban apartments.

 “Our forecast at the beginning of the year for solid 5% rent growth seems almost too conservative now, as rents have grown by 6.2% over the first half with no slowdown in sight,” according to Yardi Matrix researchers who prepared the summer 2015 edition of the Matrix National Outlook, an analysis of market conditions. “In our view, demand for apartments will continue to be above-trend for at least the next couple of years.”

The report notes that rents continue to accelerate at “an impressive rate.” During the year's second quarter, for example, the average rent in the 100 markets surveyed by Yardi Matrix grew by 6.2%, to $1,138, up from $1,071 a year earlier.

“Year-over-year increases hit double-digits in the top five markets: Portland (13.2%), Jacksonville (12.3%), San Francisco (12.0%), Denver (11.7%) and Sacramento (10.6%), while Seattle (9.1%) was just shy of that mark,” according to the report. “On the other end of the spectrum, growth was less than 3% in only three of our top 30 markets: Richmond (1.6%), Baltimore (1.6%) and Washington DC (2.3%) and was between 3% to 4% in only three markets: Philadelphia (3.2%), Twin Cities (3.4%) and Nashville/Knoxville (3.5%).”

That being said, Yardi raises the question of whether such rent growth is sustainable in the tech centers of the western region that dominate the top 10 markets. “The prodigious amount of venture capital being thrown at technology start-ups stirs memories of the tech bubble popping in the early 2000s,” the report states. “The resulting failure of tech firms led to a sharp uptick in office vacancies and left many highly educated workers unemployed, which had implications for all property types, especially apartments and retail. If the same dynamic is at work today, the booming markets such as San Francisco, Portland and Denver could be in for a shock.”

On the other hand, any such correction is likely to be far milder than it was 15 years ago. For one thing, “technology is much more integrated into the lives of consumers than it was before the last crash, which means that it encompasses a bigger share of the economy,” according to the Yardi report.

In contrast to 2000, today “virtually everyone has smartphones and multiple computers and tablets; as people's lives are more entwined with devices, they are unlikely to do without and likely to keep upgrading.” Moreover, although although tech firm stocks are trading at expensive multiples, “they are far from the giddy and unsustainable highs of the last bubble.”

Demand for apartments in the tech centers is driven not only by the proliferation of high-paying jobs, but also by the fact that “those markets have made themselves into enticing environments through amenities, transportation, parks and more,” the Yardi report states. “As such, demand is not likely to collapse, even in the face of a hiccup in a major industry.” Even so, Yardi offers a word to the wise: “Investors should keep an eye on the tech industry and assume that rent growth at some point in the not-too-distant future will return to levels more in line with wages and inflation.”