What is blockbusting in real estate?

What is blockbusting in real estate?

• A. A tactic to increase property values
• B. Convincing property owners that property values will decline due to a protected group moving in
• C. A method of advertising for homes
• D. A form of property management

Answer: (B)

Blockbusting in real estate refers to the unethical practice of inducing property owners to sell their homes at a lower price by instilling fear that a racially or ethnically diverse group will soon be moving into their neighborhood, resulting in a decline in property values. This tactic often exploits prejudices and fears within a community, misleading homeowners into believing that their investments are at risk of losing value due to changes in demographic composition. This practice has historically been used to facilitate the rapid turnover of properties, allowing real estate agents to profit by reselling those homes at a higher price once the demographic changes have occurred. The correct answer highlights the core element of blockbusting: convincing property owners of an imminent threat to their property values due to the arrival of a protected group, thus leading to irrational decisions based on fear rather than facts.

Blockbusting in real estate refers to the unethical practice of inducing property owners to sell their homes at a lower price by instilling fear that a racially or ethnically diverse group will soon be moving into their neighborhood, resulting in a decline in property values. This tactic often exploits prejudices and fears within a community, misleading homeowners into believing that their investments are at risk of losing value due to changes in demographic composition.

This practice has historically been used to facilitate the rapid turnover of properties, allowing real estate agents to profit by reselling those homes at a higher price once the demographic changes have occurred. The correct answer highlights the core element of blockbusting: convincing property owners of an imminent threat to their property values due to the arrival of a protected group, thus leading to irrational decisions based on fear rather than facts.