Housing Market Cooling in Orange County, N.Y.

New York mortgage demand has declined in 2006 and into 2007. So it’s not a huge surprise that When it comes to the housing market, the hottest town in Orange County, N.Y., last year was “none of the above.”

Both the highest median price and the largest price increase were logged by Tuxedo Park, but the Park is a better barometer for the economy of Wall Street than of Main Street.

The median sale price there is largely a function of which millionaires decide to sell in any given year.

Among ungated municipalities, the highest median price last year was seen in Woodbury ($419,250), but that was down 4.5 percent from 2005, and the number of sales in Woodbury plunged more than 25 percent, according to data compiled by the Greater Hudson Valley Multiple Listing Service.

Around the county, results were similarly tepid.

The number of homes sold fell last year in 30 of the 37 Orange County areas covered by the GHVMLS. The median sale price slipped in 15 of 37. Only five municipalities posted gains in both sales and the median price — the villages of Monroe, Walden, Tuxedo Park and Warwick and the Town of Deerpark.

Say what you want about the New York housing market boom of the past few years. At least it was orderly, a sort of structured hysteria starting at the southern edge of the county, then spreading up and radiating out until it finally reached the cities.

Retrenchment, on the other hand, is messy and uneven. Sellers in different towns — and even at different ends of the same street — come to grips with the changing market at varying speeds.

Conflicting factors compete for influence. The cities might prove resistant to a downturn, because prices there haven’t risen as much as they have elsewhere. Or they might falter as low-income buyers get squeezed by tighter bad credit home loan lending standards.

“It’s not just one simple answer,” said Ann Garti, CEO of the GHVMLS. “I don’t know if Orange County is unique, but it certainly has an array of mini-markets. That’s why it’s so hard to see a pattern.”

Some of the biggest price increases last year came in the county’s most affordable housing locales. Sub-$300,000 homes are still plentiful in Walden and Deerpark, two of the municipalities where sales and prices increased last year.

Also, all three of the county’s cities saw prices rise in 2006.

“Newburgh is the last bastion still of reasonably priced single-family homes, and urban pioneers are coming to take advantage of that,” said Kevin Barrett, an associate broker with R.J. Smith Realty.

“The boom out in the hinterland came before the boom in Newburgh, and the drop in the hinterland should come before the drop in Newburgh,” Barrett said.

Indeed, some of Orange’s steepest declines came in previously red-hot markets like the towns of Hamptonburgh and Goshen, two of the region’s priciest locales in recent years. Each town’s median price fell more than $40,000 last year, although it’s hard to pinpoint why.

One likely factor is the lack of diverse housing. In both towns, most of the homes for sale are priced north of $500,000, a segment of the market that began cooling more than a year ago. As sales in the upper strata slow down, builders lower their prices and the average home price falls.

Sunset Ridge, a subdivision of 14 luxury homes, debuted a couple of years ago with prices starting a hundred bucks shy of $700,000.

When Roz Novick of ARC Realty took over the project a year ago, one of the first things she did was drop the starting price to $579,000 - still a big mortgage loan commitment, but a big enough drop to make a difference to a buyer. She’s sold three of the homes since.

“It was just a matter of offering a wider variety of home prices,” said Novick. “The housing market is the housing market. If you’re positioned right, you’re going to sell.”

Dave Marcinak is building two homes off Goshen’s Reservoir Road.

He’s pricing them at $389,000. New construction in the area sold for $600,000 or more, but Marcinak prefers to offer smaller properties at lower home prices. He uses open floor plans and unfinished bonus space to pack 3,000 square feet of potential in a 2,000-square-foot home.

“It’s market-directed,” he said of his decision to build small.

“We’re filling a niche,” added partner Gene Primavera. “If only 5 percent of the home builders are building a house this size, what are the rest of them doing?”

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