Definition of "Blockbusting"

Sue Ann Taubert real estate agent

Written by

Sue Ann Taubertelite badge icon

RE/MAX Elite

Blockbusting is a despicable and illegal racist business practice.

Here’s how Blockbusting happens: a real estate agent, or someone posing as one, comes to a homeowner and instills him (or her) with fear of racial minorities, saying and showing bogus stats that a large number of whatever minority the homeowner prejudicially feared was moving into their neighborhood in large numbers. Because of that, the homeowner would sell the property for a lower market price, and, in turn, the alleged real estate agent would sell at a higher market price to the exact minority the original owner feared.

The practice of blockbusting has been done to White, Black, Jews, and Foreign people, but the most notorious blockbusting practices were done with White and Black, after 1910 when over a million African American from the rural southern states of the United States of America moved north to industrialized cities in need of workers due to the World War I, which recruited many workers to serve in the US Army. The scars of Civil War and Slavery were still open, so profiteers would take advantage of that, and even hire “actors” to create a sense of overwhelming presence of black people in traditionally white neighborhoods.

Blockbusting practices were nationally exposed in the 1960’s with the civil rights movement. Because of it, stricter federal real estate laws were conceived, which made blockbusting harder. For instance: door-to-door real estate solicitation got restricted in several states to avoid blockbusting. The most important measure against blockbusting, however, was 1968’s Fair Housing Act which made (by law) religion, race, and ethnicity of a neighborhood’s inhabitants part of what a real estate agent can’t tell a home buyer client when showing a house.

Real Estate Tips:

Work only with credible real estate agents! Find one at The OFFICIAL Real Estate Agent Directory®.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

The time period a real estate investment is held. The return is tied to the time period of the investment. The period is used for income tax purpose to determine whether a profit earned or ...

The term market segmentation is mostly used in marketing for assembling prospective buyers in groups based on their needs and their response to a marketing action. One definition of market ...

Premiums in insurance and real estate define as a bonus or surplus money. A dividend means a periodic fee you have to pay for your insurance protection. While in real estate, a premium ...

Exposed heating unit located within a room that transfers heat generated by hot water or stream through conduction. The surrounding air circulates around the radiator using convection ...

The floor of a building closets to the building grade. Normally, the ground floor of a building is the first floor. A ground floor can sometimes be located between the first floor and the ...

An inlaid stone or wood flooring arranged in tightly fitting geometrical patterns. It is decorative and often more than one color. ...

Issued to correct errors in another deed such as spelling errors in a name or an improper legal description. For example, a correction deed was issued to the property owner Smith to amend ...

Real estate held for productive use or investment. Land is recorded at the acquisition price plus incidental costs including real estate commissions attorney's fees, escrow fees, title, ...

Form of financing that replaces or "takes-out" a construction loan to a developer. The take-out loan is a permanent mortgage loan which replaces the construction loan when, commonly, the ...

Popular Real Estate Questions