The housing market has become an unexpected casualty of Minneapolis’s political turmoil. 

Home sales in the city plunged nearly 20 percent in January - the sharpest drop of any major US metro outside the ultra-expensive Bay Area - as buyers and sellers alike pulled back amid mounting political unrest.

At the same time, home prices have fallen by more than $20,000 since summer, wiping out equity and raising fears that the city’s housing slowdown is only just beginning.

The new data from Redfin shows just how abruptly the market has stalled - especially when compared to the rest of the country. Nationally, sales slipped just 1.6 percent over the same period, while prices are roughly flat.

Local brokers are clear as to why prices are falling and buyers are disappearing - increased ICE activity in the city.

The unrest has also caused clients to flee. Redfin agent Bridgette Prew is helping someone sell their home in the city.  

'When they listed their house, they stated ICE activity in Minneapolis was one of the driving forces,’ she said.

Immigration and Customs Enforcement (ICE) charged into Minneapolis in early December as port of 'Operation Metro Surge'. The operation significantly escalated in early January when 2,000 federal agents were deployed, and two locals were shot dead.

Unrest grew wilder when Renee Nicole Good, 37, was killed by an ICE agent in a residential area on January 7. 

A second citizen, Alex Jeffrey Pretti, was shot and killed by Border Patrol, which was working alongside ICE on January 24. 

There were major protests on the streets and even an economic blackout day, during which 700 Minnesota businesses closed down for the day.

The impact on the housing market is clear. Since June the median home price in Minneapolis has fallen from $406,000 to $384,000, according to Redfin's data. 

If history is anything to go by, experts fear the decline will worsen. When activists hit the streets of Minneapolis to protest the murder of George Floyd in May 2020, the median home price sank $12,000 in just one month. 

Sellers in Minnesota are retreating too. 

New listings in the city fell 5.4 percent from a year earlier, compared with a roughly 1 percent rise nationwide - a sign that homeowners are choosing to sit tight rather than test the market. 

Local brokers say home sales slumped in January as buyers paused - or disappeared - for several reasons linked to the ICE raids.   

'Uncertainty due to ICE raids, protests, political unrest, and so on is causing people to hold off on big decisions, like buying a house,' Kristen Herhold, a local real estate agent, told the Daily Mail. 

'This usually first shows in fewer showings and longer days on market.'   

Another reason for the slump in sales is that Minneapolis's residents are devoting their time and energy to helping the community rather than selling or buying homes. 

'Some community members are focused on advocacy and response related to ICE activity, which may be contributing to some delayed listings and paused searches,' Redfin agent Emily Olson told Daily Mail.

'A segment of residents are focused on peaceful protests, supporting families whose children are staying home from school, organizing meal support for those hesitant to leave their homes, and other forms of mutual aid.'

The disruption is now spilling into other parts of the housing market.

Olson said ICE enforcement may be slowing new home construction, as many job sites are seeing workers disappear due to the heavy reliance on immigrant labor.

'Work crews have either been detained, fear enforcement actions, or relocate to states with less ICE activity,' Redfin agent Bridgette Prew explained. 

Realtors say there are other explanations for the halt of sales, such as high mortgage rates, rising home-insurance costs, and maintenance concerns. 

Olson says the true affect of ICE's raids on Minneapolis's housing market won't show for a while longer. 

'Our spring market tends to be from February through June. We've had some sellers ask if they should delay their listing due to ICE, and we're telling them not to let current headlines dictate their timing,' Olson said. 

'But if ICE activity doesn't diminish in the next month or so, we may start to see it have a tangible impact on the spring market.'