What does blockbusting refer to in real estate?

Blockbusting refers to the act of persuading property owners to sell their houses at lower prices by instilling fear that people of a different race or ethnicity are moving into the neighborhood, which supposedly leads to a decline in property values. This unethical practice exploits racial prejudices and often results in the forced movement of neighborhoods' minority groups, further perpetuating segregation.

The nature of blockbusting is rooted in manipulation, whereby real estate agents or investors may spread unfounded fears or misinformation to motivate sellers to act impulsively. This practice not only affects individual homeowners but also contributes to broader issues of segregation and inequality in housing markets. Understanding this concept is crucial for those in the real estate field, as it highlights the legal and ethical responsibilities related to fostering inclusive communities.