NEW YORK—One analyst sees the price of taxi medallions in New York City possibly stabilizing—for now.
Taxi medallion prices in New York City averaged almost $561,000 for July and August, slightly higher than the $550,000 recorded for May and June, reported Keith Leggett, former senior vice president and senior economist at the ABA.
“For the months of July and August, there were seven arm's length transactions, of which five were foreclosures. Six transactions were between $550,000 and $620,000 with three transactions at $620,000,” reported Leggett on his Credit Union Watch blog.
Leggett said that while it appears that taxi medallion values might be stabilizing, taxi medallion prices are significantly below their 2014 values of $1 million. Due to the impact of ride sharing services such as Uber and Lyft, plummeting medallion values have led to problems at some Big Apple CUs that make medallion loans.
As CUToday.info reported, in August, the $1.9-billion Melrose Credit Union was issued a consent order by the New York State Department of Financial Services following a joint safety and soundness exam conducted by the Department and NCUA. In July, CEO, Alan Kaufman, departed Melrose, leaving Steven Krauser as acting CEO. Montauk CU was conserved last September and was later merged into Bethpage FCU.
While medallion prices appear to have stabilized for now, Leggett noted that one transaction “appears to be an outlier at $350,000. But if New York City taxi medallion prices follow the trends seen in other cities, this $350,000 transaction may become more prevalent in the future. The evidence indicates that the value of the collateral backing taxi medallion loans has become significantly impaired and the credit unions holding these loans will eventually need to take impairment charges to reflect the decline in the value of the collateral.”