Lab-Grown Diamond Prices & Value Analysis
Understanding the price of lab-grown diamonds and how to get the best value
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Understanding the price of lab-grown diamonds and how to get the best value
Lab-grown diamonds have surged in popularity recently, offering a more affordable alternative to natural diamonds. These diamonds are made in labs but share the same physical and chemical properties as their natural counterparts. Lab-grown diamonds are significantly cheaper. A one carat lab-grown diamond costs about $1,200 (depending on the quality), while a similar natural diamond can cost $4,200.
While they can be more budget-friendly, it’s essential to understand that lab-grown diamonds typically have a lower resale value compared to natural diamonds. In this article we will discuss everything you need to know about lab grown diamond pricing.
Overview of lab-created diamonds
Prices of lab-grown diamonds
Lab-created diamonds vs. natural diamonds
Do lab-grown diamonds have value?
Are lab-grown diamonds cheaper than natural diamonds?
Lab-grown diamonds fall in value
Are lab-grown to natural diamonds a fair comparison?
Purchasing lab-grown diamonds today
Bottom line recommendation
We believe diamonds are beautiful and a great choice for high-end jewelry, but we don’t buy into the marketing that says you must buy a diamond for your engagement ring.
In other words, our goal isn’t to persuade you to buy a diamond. We’re here to help you get the best bang for your buck. We work to find the right balance of quality and size for your budget, all while avoiding rocks or pitfalls along the way.
We also agree that synthetic diamonds look exactly like natural diamonds. As long as we’re referring to lab-created diamonds (and not diamond simulants or cubic zirconia) they are “real” diamonds. I won’t go into the technical details of how lab diamonds are made because that’s not the issue. The main concern is value and wanting our readers to make smart, long-lasting purchases.
This article focuses on the value and price of lab-created diamonds. If you’re interested in the ethical issues related to diamond buying, see this comprehensive article.
” I think lab diamonds are here to stay and I think it’s a choice for the consumer to make, and it’s our job to educate them.… A lab diamond doesn’t say I love you any less than a mined diamond says I love you.” Beryl Raff, Former CEO of Helzberg Diamonds as reported in JCK Online.
Lab-created diamonds are man-made diamonds that mirror the qualities and appearance of natural diamonds. These synthetic stones consist of carbon atom structures with the same chemical and visual characteristics of natural diamond crystal. For example, this stunning 3.00ct from Brilliant Earth is a lab-created diamond. It’s a beautiful stone, but the value and resale value is incredibly low.
Just as with natural diamonds, the prices of lab-created diamonds fluctuate greatly. They can be as low as this 1.02 carat for $1,090 from James Allen or as expensive as this whopping 13.06 carat for $51,500 from Brilliant Earth.
Here are the main factors that impact the price of lab-created diamonds:
Diamond shape: The most popular diamond shape is the round brilliant and also the most expensive. That’s partly because round cut diamonds offer the most brilliance and sparkle. After that, oval cuts and asscher cuts are the next most expensive.
Diamond cut: A diamond’s cut impacts its beauty more than anything else. An ideal or excellent cut diamond will be more stunning and more expensive than a “Good” or “Very Good” cut diamond.
Color: Lab-created diamonds are graded by the IGI on a scale of D to Z. A D colored diamond is colorless, while a Z diamond has a noticeable yellow or brown tint. Diamonds with a better color grade will be more expensive, but the difference isn’t always noticeable. That’s why we recommend looking for a diamond in the G-J range, because they look colorless to the naked eye but cost far less than D, E, and F colored diamonds.
Clarity: When we talk about diamond clarity, we refer to how clean it is of blemishes and inclusions. Diamonds without inclusions will be more expensive than diamonds with noticeable imperfections. We recommend looking for VS1 and VS2 diamonds because they’ll be eye-clean but cost much less than FL or VVS diamonds.
Certification: The certification itself doesn’t increase or decrease a diamond’s price, but verifies what it is you are paying for. We recommend an IGI certificate for lab-created diamonds. The IGI offers the most extensive and reliable grading for lab-created diamonds. By choosing an IGI certificate, you’re ensuring that the diamond you’re getting is what the sellers say it is.
Take a look at these beautiful rings. If you replace the diamond with one of James Allen’s lab-created diamonds, you will save a nice chunk of cash (also check out the best places to buy lab-created diamonds here).
Diamonds Pro helped us pick a diamond, according to our budget and a few other criteria. We ended up buying a loose diamond from James Allen. We felt that we got very good value for money. The diamond was appraised by another jeweler where we live, confirming its characteristics and value. Finally, we had the diamond set in a ring by a local jeweler, and we’re very pleased with the result! Thank you Diamonds Pro 😊…see more
Lab-created diamonds are made over the course of several weeks, while natural diamonds take billions of years to form. Lab-grown diamonds are created through a high-temperature carbon growing and compression process. Real diamonds are cut from a rough stone into the shape and carat weight that’s desired. Similarly, once a synthetic diamond is grown, a cutter forms the shape.
Placed side by side, a lab-created and a natural diamond look nearly identical. The price and value, however, differ—sometimes dramatically. However, the lab-created diamond doesn’t retain any value. It can’t be resold to a jeweler and it won’t garner more than a few dollars on a site like eBay. On the other hand, the natural diamond can be resold for at least 50% of the original price—but potentially much more.
Lab-created diamonds have very little to no resale value. That means if you buy a lab-created diamond, you won’t be able to reap any part of what you paid for it. If you try to sell a lab grown diamond on eBay, you’ll get pennies on the dollar. From a value perspective, you’d need to buy a lab-created diamond at a massive discount to justify giving up the value retention of natural diamonds.
Lab-created diamonds are cheaper than natural diamonds but they’re a worse bang for your buck since there’s no resale value. As we explain in this article, you shouldn’t view your diamond as an investment, but you shouldn’t ignore its value entirely.
For example, let’s say an average natural diamond retains about 50% of its value after purchase. Eventually, the value of the diamond will rise (historically, diamond prices rise consistently). If you ever try to sell your diamond, you should get at least half (or possibly much more) of your original purchase price.
Here’s an example: this is a stunning 1.21ct diamond from Blue Nile that we found. It’s an incredible value at $5,560. We asked companies that purchase diamonds how much they’d offer for it. They thought the diamond was stunning and were willing to pay $2,976. That’s 55% of the original purchase price. If diamond prices rise (as they historically do), the value only increases.
With a lab-created synthetic diamond, you would not have the same experience. For instance, this beautiful 1.37ct lab-created diamond from James Allen costs $1,800. It’s cheaper than the similar natural diamond we just talked about. However, if you were to try and resell it, you might make $50 or less.
The process of creating synthetic diamonds isn’t cheap. It requires specialized machinery, diamond-growing experts, diamond cutters, and more. Unlike cubic zirconia or moissanite, lab-created diamonds involve either High Pressure-High Temperature (HPHT) or Chemical Vapor Deposition (CVD) processes. In order to multiply the carbon atoms and compress them into a diamond, they need time, innovative technology, and expertise. That’s why the prices for lab-created diamonds are still on the higher side.
In the last three years, the price changes in the lab-created market have been absolutely alarming. We recently did our own comparisons with products from the major online retailers of lab-created diamonds (MiaDonna, Diamond Foundry, and Brilliant Earth) to natural diamonds from James Allen.
We compared a GIA certified diamond from James Allen to an IGI certified diamond from Brilliant Earth. For lab-created diamonds, IGI certified diamonds are the standard. The GIA, on the other hand, is what we recommend for natural diamonds. As we explain in our IGI article, it’s a much more “generous” laboratory, so we adjusted the grades accordingly.
Price Comparison: Beginning of 2017
For the lab-created stone, we chose Brilliant Earth’s 0.70 I VS1 IGI certified round diamond (no longer available) for $1,870. For the natural diamond, we used James Allen’s 0.70 J VS1 GIA certified round diamond for $1,590. For these two identical diamonds, the lab-created choice was 25% more expensive than the natural diamond.
At the time, we also compared 12 other pairs of natural vs. lab-created diamonds. On average, the lab-created diamonds were 23% more expensive than similar real diamonds.
Just one year later, the difference is staggering.
Price Comparison: End of 2017 to 2021
From the example above, you can see that at the beginning of 2017, lab-created diamonds were actually higher priced than their natural diamond counterparts. By the end of 2017 leading up to today, there’s a very different landscape. Prices have dropped dramatically for man-made diamonds while prices for natural diamonds have increased slightly. The change is dramatic.
The natural diamond price change was expected. Diamond prices historically rise at a steady rate. That’s why you shouldn’t completely discount the “investment value” of a diamond.
On the other hand, the price of the lab-created diamond was alarming. In just one year, the price of the two identical diamonds dropped 30%. What’s worse is that the prices might drop even further.
It’s important to note that this isn’t a one-off comparison either. We analyzed several diamonds and the trend is the same. As an example, a one carat I VS lab-created diamond cost $4,100 at the beginning of 2017 and now is down to $2,850 (a 35% drop).
When doing these comparisons, we came upon a fascinating phenomenon that highlighted the alarming nature of the price change. When we reviewed diamonds on Diamond Foundry (made famous by their movie-star investor), we noticed the prices of larger diamonds dropped at a faster rate than smaller stones. This distinction shows that the major roadblock in pricing is merely manufacturing expenses. The price will continue to fall because the technology will become less expensive. In other words, there is no inherent value in the product.
Overall, the price of lab-created diamonds has halved in the last two years according to a report published by Bain & Company.
Think You’re A Diamond Pro?
Both of these are beautiful 1.70ct H VS2 Excellent cut diamonds
One is lab-created and costs $2,420
One is mined and costs $11,560
Can you tell which is which?
Choose the diamond you like better and see if you are a pro!
The market for lab-created diamonds is eerily similar to what happened with lab-created emeralds. Emeralds were (and still are) one of the rarest precious gemstones in the world. Technology innovations allowed manufacturers to replicate a natural emerald and create a virtual copy.
I recently had the chance to talk with a former CEO of one of the largest lab-created emerald wholesalers (the CEO wishes to remain anonymous).
When lab-created emeralds burst on the scene in the early 1990s, people were excited and jumped on the bandwagon. These synthetic emeralds popped up in jewelry all across the United States. But it didn’t stop there.
“As with any technology, as the demand increases, the competition floods in. The prices for lab-created emeralds plummeted below any level we could have imagined. One day we were selling lab-created emeralds for hundreds of dollars per carat. The next day the price was in the $40 per carat range,” the former CEO recalls.
Soon after, people were buying synthetic emerald jewelry for $79 to $99. Lab-created emeralds were popular for a year or two, then the excitement faded away. You can still buy them, but they’re far from in-demand.
Is it fair to compare lab-created emeralds to diamonds? Yes and no. From a technical perspective, it’s hard to imagine that the price of lab-created diamonds won’t continue to plummet. There’s no cap on supply and economies of scale, and innovations in technology continue to progress. These factors will all continue to force the price down.
Will lab-created diamonds fade away in popularity? That’s a trickier question. Emeralds are beautiful, no doubt about it. But the diamond market has positioned itself as a must-have when getting engaged (hats off to De Beers’ incredible marketing for the last 80 years).
If I were to pull out my crystal ball, I’d say that lab-created diamonds will thrive in the market for engagement rings priced under $1,000. Similar to the emerald market, no one that’s investing a hefty sum of money will be interested in a lab-created diamond. But if you’re looking at a dull, low-quality diamond from a bargain basement retailer or a lab-created diamond, many people might still opt for a lab-grown stone.
If you’re in the market for a diamond engagement ring, you can technically save big money by going with a lab-created diamond instead of a natural diamond. But you need to be prepared for the fact that it’ll be selling for a fraction of the price in the near future.
Other than sheer price, you might be interested in a lab-created diamond for other reasons. Perhaps you’re an engineer and are intrigued with the technical process of lab-created stones. Or maybe you’re looking for an ethical and environmentally-friendly choice.
Diamonds in general don’t make good investments, but lab diamonds are particularly bad in this respect. While natural diamonds retain around 50% of their value, lab diamonds lose almost all (if not all) of their value after purchase.
The market for lab-grown diamonds is rising, but the majority of buyers still prefer natural diamonds. It’s estimated that lab diamonds account for 8-10 percent of the entire diamond market worldwide, though some sources have that figure as high as 20%.
In terms of monetary value, lab diamonds lose almost all their value the moment they’re purchased. You can expect to recoup very little of the original purchase price by reselling your lab diamond after purchase. Add to this the fact that lab diamond prices are consistently getting lower, and you should be prepared to see the same diamond you bought on sale much cheaper in a year or two in the future.
Lab diamonds hold virtually none of their monetary value after the initial purchase. However, if you determine value in a non-financial sense, such as the hardness, quality and beauty of the diamond, then lab-grown diamonds will hold their value indefinitely. As they are chemically identical to natural diamonds, lab diamonds are forever, as the saying goes.
We’re not saying you should buy into De Beers’ marketing BS and choose a diamond for your engagement ring. But if you do opt for a diamond, you have a choice to make: if you are concerned with the long term value of your diamond, stick with natural. If you want the most WOW factor for your money, go for a lab-created diamond.
If you’re intrigued with the idea of a lab-created stone and not bothered by seeing your diamond on sale for a lower price in the future, you can get more bang for your buck by going with a lab-created diamond. We recommend James Allen for lab-created diamonds. They’re IGI certified and their high-end photography allows you to view each diamond up close before purchase. Another company you should check out is Blue Nile. They offer lab-created diamonds and have plenty of diamonds to offer.
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