Recovering housing market deflates doctor signing bonuses
■ Potential employers are beginning to assume that selling a house is less of an issue to be dealt with in physician relocation.
By Sue Ter Maat — Posted March 4, 2013
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While physicians' signing bonuses and relocation allowances are here to stay, they are expected to become smaller in the coming years because the housing market is less volatile, according to recruiting experts.
When the housing market tanked a few years ago, it became more difficult for doctors to sell their homes. As a result, physician employers increased the number of incentives to entice doctors to relocate. Now that the market is deemed more stable, the size and frequency of the incentives are expected to dip, said Jim Stone, president of the Medicus Firm, a physician recruiter.
In 2012, the average signing bonus was $24,037, according to the Medicus Firm's 2012 National Physician Placement Data, which was released in February. In 2010, it was $25,225.
Merritt Hawkins, another physician recruiter, showed similar results. Average signing bonuses were slightly higher in 2007-2008 and 2008-2009 — at $24,800 in each period — than in 2011-2012, when they averaged $23,388.
“The signing bonus became a way to really buy away apprehension from candidates who were worried about selling their homes,” said Tommy Bohannon, divisional vice president of recruiting for Merritt Hawkins. “You don't have to worry about selling your home right away if the hospital is going to float you for a while or you can make a big down payment on a house.”
Average relocation allowances showed a similar trend. They averaged $10,719 in 2012, according to the Medicus Firm report. In 2011, the allowance averaged $12,306.
Merritt Hawkins data follow the same pattern, where the average relocation allowance in 2011-2012 was $10,035. In 2010-2011, it was averaging $400 more.
The authors of the Merritt Hawkins report attributed the changes in relocation allowances to the volatile housing market, which made it difficult for some candidates to move without assistance.
Bohannon said that while signing bonuses and relocation allowances are falling, they have been generally growing in popularity in the past few years.
He said about 10 years ago, 36% of employers offered signing bonuses, based on Merritt Hawkins reports. Now at least 70% are offering them. The incentives have become more prevalent due to more attention given to physician shortages, he said.
Real estate industry reports back employers' contention that relocation has gotten easier.
The number of improving housing markets has expanded for the sixth consecutive month, according to a February report from the National Assn. of Home Builders. In January, 242 markets were listed as improving, with the number bumping up to 259 in February. Now all 50 states have at least one metro area that listed as improving, an indication of the housing market's recovery, said NAHB Chair Rick Judson, in a prepared statement.
Meanwhile, the National Assn. of Realtors said Feb. 21 that sales of existing homes continue to improve. At the current sales pace, it would take 4.2 months to sell all available homes, the lowest rate since April 2005. The median sales price nationally for an existing home in January was $173,000, up 12.9% from January 2012, and the 11th straight month of year-over-year gains.