How is blockbusting defined in real estate?

Blockbusting refers specifically to the practice where real estate agents or investors persuade property owners to sell their homes at lower prices by inducing fear or panic over the perceived influx of a protected class of people into the neighborhood. This often involves misleading claims that this demographic shift will lead to a decline in property values or changes in the community, prompting homeowners to sell their properties hastily.

The correct answer accurately captures this definition of blockbusting, emphasizing the unethical tactic of leveraging fear of change among homeowners regarding the movement of specific groups protected under the Fair Housing Act. This practice is illegal and violates fair housing laws designed to promote equality and prevent discrimination in real estate transactions.

In contrast, the other options do not pertain to the established definition of blockbusting. Inducing owners to sell based on rising property values is more aligned with legitimate market practices, while a profit-making scheme to sell undeveloped land does not reflect the coercive tactics inherent in blockbusting. Lastly, while making false representations about local schools could involve unethical practices, it does not specifically encompass the territorial dynamics and discrimination central to blockbusting.