I don't know about the market in AZ and Southern California, but have bought 98% - 100% Safety Hammerless revolvers for $350 and less on national auction house auctions. An all brown 2" Safety denotes zero percent original finish, so half of what they are asking would seem to be top dollar.
I think Ed has nailed the full retail value of these guns. Nahas & Supica do a pretty good job of valuing S&Ws, and a Fair condition 32 Safety is $150, plus double or triple the value for a factory 2". A standard barrel length 32 Safety in Fine condition is stated at $285. That would mean that $1000 is full retail value and I bet the LGS would have a hard time with that price, plus would quickly dismiss anything less. Afterall, they have been sitting in the shop for a long time already. Sleep well!
It seems that there is no consensus of how many 32 Safety 2" guns were ever built?