Alabama Post Licensure Practice Exam

Blockbusting refers to a practice where real estate agents or developers scare homeowners into selling their properties quickly and often at below-market prices by promoting the idea that a certain ethnic or demographic group is moving into the neighborhood. This strategy often leads to rapid demographic change within an area and typically results in driving property prices down.

In this context, the statement about driving prices down to cause ethnic transition accurately captures the essence of blockbusting. Agents would often exaggerate fears about declining property values or increased crime to motivate homeowners to sell their homes in haste, thereby facilitating this transition.

Other options, while related to real estate practices, do not accurately depict blockbusting. For example, increasing property values or marketing luxury properties do not involve the unethical or exploitative tactics inherent to blockbusting. Similarly, encouraging investments in real estate focuses on promoting positive growth and does not involve the manipulation or fear tactics associated with blockbusting. Understanding this practice is important, as it highlights a significant issue within real estate ethics and community dynamics.