Which term refers to fraudulent practices aimed at creating panic selling in a neighborhood?

The correct term that refers to fraudulent practices aimed at creating panic selling in a neighborhood is blockbusting. This practice involves real estate agents or others creating fear among homeowners about changes in the demographics of their neighborhood. They often spread false information that suggests property values will decline due to the influx of new residents from a different racial, ethnic, or socioeconomic background. As a result, homeowners are pressured to sell their properties quickly and often at a loss, creating a cycle of panic selling.

Blockbusting is illegal and unethical, as it exploits the fears of homeowners for financial gain. This practice has historically led to significant harm within communities, further contributing to segregation and instability. Understanding blockbusting is crucial for those in the real estate field, as it highlights the importance of ethical practices and the protection of fair housing rights.