PITTSBURGH — After a long run-up in the stock market, Joe Biondo felt the time was right in the fall of 2021 to cash out and use some of the money he made to buy his girlfriend of four years an engagement ring.
The 28-year-old Lawrenceville man had a budget of $20,000 to spend, which meant he didn’t need the credit card financing his jeweler offered and he didn’t need to buy the less expensive laboratory-grown diamonds that have become more popular.
“I love it. I never take it off,” said Jillian Marzo, 27, referring to her engagement ring, which features a 2-carat natural diamond center stone. The elementary school counselor said she helped Biondo pick it out.
The diamond jewelry industry has rebounded in a big way since the early days of the pandemic, when business practically dried up overnight.
Consumer demand for diamond jewelry is sky-high, which is why prices for natural mined diamonds rose 11 times in 2021, according to Instore, a New Orleans-based trade publication for the jewelry industry.
Even as diamond producers have imposed one hike after another on the price of mined stones, jewelry sellers have been ringing their cash registers nonstop for more than a year as couples in love are willing to pay higher prices.
With the average engagement ring costing between $4,000 and $8,000, it is one of the biggest investments couples make when starting their lives together. As the nation recovers from the pandemic, Pittsburgh area jewelers say consumer purchases for diamond jewelry has never been more robust.
“When the pandemic first started everything came to a grinding halt, of course. There was so much uncertainty,” said James Douglas, owner of James Douglas Jewelers in Monroeville.
“But once things reopened in 2020 up until now, its been the best of times for the engagement ring and wedding ring market in my career. And this month we’re celebrating our 25th year anniversary.”
While diamonds continue to be the most popular type of center stone in engagement rings, a growing number of consumers [particularly younger people] are opting for a different type of diamond — lab-grown.
Lab-grown diamonds are man-made stones that are identical to natural diamonds in their appearance. The most obvious difference between the two is the price. Lab-grown diamonds cost about half as much as mined diamond. Socially conscious consumers prefer their eco-friendliness and the absence of humanitarian conflicts that often come with diamonds mined from beneath the earth’s surface.
“Right now, lab-grown diamonds are kind of new, so they’re demanding $2,500 to $3,000 a carat as opposed to $6,000 per carat for natural earth-mined diamonds,” said Lisa Marie Kotchey, owner of Lisa Marie Kotchey Designs in Sharpsburg.
“That’s what lab-grown diamonds are selling for now,” she said. “But there’s no guarantee as the market gets flooded with them that they’re still going to be worth that in a year’s time.”
Millennials are changing every industry because of their sheer numbers and the way they buy — from banking to retail — and the engagement ring market is no different.
The high price of mined diamonds and the ethical concerns related to diamond mining are some reasons why younger shoppers are showing more interest in lab-grown diamonds for engagement rings or another less expensive diamond lookalike gem called moissanite.
Pandora, the world’s largest jewelry maker, announced a year ago it would no longer use mined diamonds in its jewelry. The company said its decision to only use laboratory grown diamonds going forward stemmed partially from consumer demand.
The average person actually cannot tell the difference if someone is wearing a lab-grown diamonds or moissanite, but there are some drawbacks to choosing those alternatives. Jewelers say buyers should know what they’re buying and make the decision with caution.
“Years ago, when cubic zirconia came out on the market it was one of the first synthetics out there for diamonds and it was like $500 or $600 per carat,” Kotchey said. “Now, I can get a one-carat stone for $5 or $6.
“When moissanite came out, moissanite was a lot more expensive than it is now,” she said. “It’s dropped to at least half of what it was when it came out.”
Kotchey said she keeps some lab-grown diamonds in the store to show people what they are. The bulk of her customers want mined diamonds. But about 25% of customers — mostly younger — want more bang for their buck and take the lab-grown option.
Douglas said he doesn’t stock lab-grown diamonds, but he will order them upon request for customers.
“The pro is right now, you’re going to buy a lab-grown diamond for about half the price of the mined diamond,” Douglas said. “The con is I can’t tell you what the future value of the lab-grown stone will be. They’ve already begun to drop quite a bit in the last four years.
“Our policy in the store is if you buy a regular mined diamond from me — as long as I’m in business — if you bring it in I’ll give you your full value back for the diamond towards one of greater value,” he said. “I can’t make that promise on a lab-grown diamond.”
MAKING WISE DECISIONS
Melissa Zurick, a 41-year-old social worker, didn’t see it coming when her boyfriend Stephen Dudzik got down on one knee and proposed to her in October.
They were on vacation overlooking the Great Smoky Mountains in Tennessee when he presented her with a princess cut 1.2 carat mined diamond.
“I wanted a very unique personalized ring,” said Dudzik, 46, of Murrysville. “That’s why I went the route of designing it from scratch. I wanted the appropriate size diamond that she deserved and that I could afford.”
It will be second marriages for both of them.
Dudzik, an IT professional, said he raised $12,000 to buy the diamond ring from the sale of the home he shared with his ex-wife. He’ll use the rest of the money for a home he and Zurick will buy together.
Most of the money Biondo made from the sale of his stock last year also went towards purchasing the Lawrenceville home he shares with Zurick.
He grew up in Murrysville. She is a native of Buffalo, New York. They met at Duquesne University and have dated for four years.
“The first thing I did was put a downpayment on the house in April 2021,” said Biondo, a manager at Aramada Supply Chain Solutions in Fox Chapel. “I continued to save and invest and sold some more stock in early September 2021, and made the ring purchase.”
Green Tree-based financial adviser Newlin Archival said she advises people who want to buy an engagement ring to either pick up a side job or sell some unwanted items to raise cash if they can’t put aside enough from their regular earnings.
Jewelry store credit cards generally carry higher interest rates than what banks and major credit card issuers charge. But it is best to avoid debt, if possible, for an engagement ring.
“Resist the urge to use your retirement account as a piggy bank,” said Archinal, a financial adviser at 4Rivers Wealth Management. “Avoid taking a loan from your 401(k) plan or an early distribution from a retirement account like an IRA.
“Both options sidetrack retirement goals and come with potentially higher costs and tax penalties,” she said.
Archinal also pointed out that under Pennsylvania law, an engagement ring is considered a “conditional gift.” What that means is if someone gives an engagement ring to someone in anticipation of marriage, if the two don’t get married, the property technically should belong to the original purchaser.
“While every question of, ‘Will you marry me?’ should take a couple down the aisle, sometimes it doesn’t work out,” Archinal said.
So much has changed in the engagement jewelry industry in 25 years, Douglas said.
“People have always been getting engaged,” he said “But it used to be more traditional. You came in, saw a couple of sets — the men’s and the lady’s matching — and you purchased that.
“Today, there are so many web influencers and movie stars and people who are fashion trend-setters that if a movie star comes out wearing a pear-shaped diamond we notice this because for the next two months, everyone’s calling asking for pear-shaped diamonds,” he said.
The surge in price for diamonds has mostly affected the higher-end jewelry market.
“Anything that’s two-carats or above has gone up kind of exponentially,” Kotchey said. “The increases have been 10% here and 15% there. That’s how it’s been for the bigger stones.”
The sweet spot for what most people pay for engagement rings is between $4,000 to $8,000. That’s what 80% of people spend, according to local jewelers. The other 20% of engagement ring buyers pay significantly more or less.
“I’ve had days when a young man comes in and says ‘I’ve only got $1,000 to spend. And we have those rings for him,” Douglas said. “Then the next person will come in and say ‘I want to buy a three-carat stone for $40,000. And we have that also.”