For the next , the route passes by open fields as it overlooks the lake to the east. The route gradually descends back into the valley as it heads further northward into the town of Fleming. Once in Fleming, NY 38 runs along the lakeshore and serves a long line of lakeside homes as it passes by a series of fields to the west. The amount of development along the route begins to increase at the northern end of the lake in the hamlet of Melrose Park, where NY 38 meets NY 437 by way of a traffic circle. At this point, NY 437 becomes the primary lakeside highway while NY 38 becomes a four-lane divided highway and heads northwest as Lake Avenue toward the city of Auburn.