What is the common result of blockbusting on neighborhoods?

Blockbusting is a practice that involves manipulating homeowners to sell their properties under the premise that changes in demographic makeup will negatively affect property values. This often leads to panic selling among homeowners who feel their property's value is at risk. As more homeowners sell in a rush due to the fear of declining neighborhood conditions or property values, the overall supply of homes in the market increases, which can drive down property values further.

The result of these panic sales creates a cascading effect, where the perception of reduced property values becomes a self-fulfilling prophecy, leading to diminished investment in the area. As homeowners sell their properties quickly and often at lower prices, the neighborhood experiences a significant decrease in property values, affecting long-term stability and economic health. This outcome contrasts sharply with situations that might lead to stable property values or improved housing options, as those typically arise from positive market dynamics rather than fear-driven selling.