Best place to get the most authentic Icelandic wool sweaters ("Lopapeysa") and other wool goods. This farming family raise their own sheep and knit the sweaters at home -it doesn't get any more authentic. The price is better than you'd get in Reykjavik and the owner is a very friendly man. Highly recommended.
Directions: The google maps location is accurate. From the main road, look for the metal gates; often a sweater is hanging from them. There may be a sign for "galleria" Follow the driveway all the way and fork left past the family home and continue to the last house (brown wooden building). Horses might be grazing nearby and are very friendly. The door is on the left of the building; but you might have to wait a bit for the farmer to run down from the fields.