Blockbusting is a practice in which unscrupulous real estate investors induce panic-selling of homes at prices below market value. Blockbusting was usually done by telling homeowners that their properties are going to decline in value significantly and suddenly due to people of other races moving into the neighborhood. This practice is illegal.
Though this practice may sound obscure, it was extremely common in midcentury America. At the height of blockbusting, real estate investors were flipping multiple blocks per week in Chicago by paying people of color to stage fights and drive around blasting music all night. Homeonwers responding to these race-based fears were afraid that their homes would soon have no value, so they would panic sell at steep discounts, and the real estate investors would then buy these cheap properties and sell them for a profit.
Fair housing laws have made blockbusting illegal because of how widespread this strange and offensive practice became in many parts of the country.
