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Blockbusting in real estate is the illegal practice of convincing homeowners that their neighborhood is undergoing a significant change in demographics—typically portrayed as negative—so that they will sell or rent their homes at lower-than-market-value prices.
Blockbusting was a business practice in the United States in which real estate agents and building developers convinced residents in a particular area to sell their property at below-market prices. This was achieved by fearmongering the homeowners, telling them that racial minorities would soon be moving into their neighborhoods.
Like redlining and steering, blockbusting is an illegal act of discrimination that still happens frequently today in the real estate market. In this article, we’ll cover what blockbusting is, some examples, and of course, what you need to know to pass the real estate exam, so let’s go!
Blockbusting occurs when real estate professionals convince homeowners to sell their properties for cheap prices for fear that shifting demographics will cause them to depreciate in value. White flight and blockbusting typically happen simultaneously.
So, the real estate industry targeted white homeowners to convince them to sell their homes using a scheme known as blockbusting.
Blockbusting, also known as panic selling, is the discriminatory practice of encouraging homeowners to sell their homes below market value due to the neighborhood’s changing demographics.
In the 1950s, the city of Compton was nearly all-white. But by the 1970s, it had turned majority Black — in part due to a state-sanctioned predatory real estate practice called blockbusting.
Blockbusting is a real estate practice where agents or investors persuade homeowners to sell their properties at a lower price by instilling fear that people of a different race or ethnicity will soon move into the neighborhood.
This paper focuses on the ability and the incentives of real estate brokers to engage in blockbusting. It presents a continuous-time dynamic model of a neighborhood in racial
A predatory real estate practice, blockbusting leverages racial prejudice to drive white homeowners out of their neighborhoods and coerce them into selling their properties at low prices.