I say this every time a thread like this one comes along but it is still true. Guns like the S&W Model 66, if in nice condition, will only become more expensive as time passes. Remember, they are no longer made in that form and every month, there are fewer of them that are both in very good condition AND available to be purchased while the number of potential buyers who have learned about those older Smith & Wessons is on the rise. It is a diminishing supply with an increasing demand.
So far, you've seen what just two people feel is a fair price for that gun. I own two Model 66-2s, a four-inch like that one but with target trigger and hammer and a trigger stop, a feature that some but not many had, and a six-inch with target trigger and hammer. I paid less than $500 for each one about five years ago so they have appreciated roughly 20% in that short amount of time.
Whatever you pay for that gun today will seem quite reasonable before long!
Ed