Now is not the time to be building new homes in the Sun Belt.

According to today’s S&P Case-Shiller home price index, housing prices in Phoenix and Las Vegas dropped by more than 30 percent in August, compared to the same month a year ago. Formerly bright housing markets such as Miami, Los Angeles, and San Diego did almost as poorly, with annual home price declines of more than 25 percent.

“The downturn in residential real estate prices continued, with very few bright spots in the data,” David M. Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.

Overall, home prices plunged 17.7 percent year-over-year for Case-Shiller’s 10-city composite, which includes Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington, D.C. The 20-city composite index reported a 16.6 percent slide, which covers the 10 cities listed above plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix; Portland, Ore.; Seattle, and Tampa.

What cities posted the smallest annual home price declines? Dallas (down 2.7 percent) and Charlotte (down 2.8 percent), making them relative winners in this painful race to the bottom of the market. 

And there may still be room for housing prices to fall even more. "This report measures house prices over June, July, and August, when the economy was still on its feet," noted Patrick Newport, U.S. economist at IHS Gloal Insight, who points out that the Case-Shiller indices "are calculated using a three-month moving average. The real economy took a sharp turn for the worse towards the end of the third quarter. Making matters much worse, financial markets fell into disarray in mid-September, after Lehman Brothers went bankrupt. So as bad as the latest Case-Shiller numbers appear to be, they are bound to get much worse."

Alison Rice is senior editor, online, at BUILDER magazine.

Learn more about markets featured in this article: Atlanta, GA, Los Angeles, CA.