Around here (Northern California) $1500 is sky high, but you can almost always find at least one 6" Atlas / Craftsman lathe on CL at any time. Most seem to sell within a week or two at $500-600, but those are usually needing a bit of work, and with minimal tooling. Better condition / well tooled ones also turn up in that price range but they usually sell much faster at that price.
I picked up a well tooled 101.21400 last year for $650, but it did require a lot of clean up. In good condition but it had been sitting for a long time and a lot of parts were seized up with old dried up oil which required a tear down and cleaning.
After I bought mine I watched another that appeared to be in good shape, with lots of tooling and a decent home built bench sit for a couple months. Started at $1200, and week by week the price dropped by $100. It finally went away after it got to $800.
There is one now asking $1200, minimal tooling but has an original cast iron and wood stand, the listing is 21 days old.
Location makes a big difference on price. As I said these are not hard to find around here which keeps the price down. There is also the SB9 Matt mentioned. These also turn up quite often in the $1000-2000 range, which I think holds down the price on the 6". Once you break $1000 I think a lot of people start to consider a basic tooled 9" vs a well tooled 6".
If I were starting from scratch with a budget in the $1500 range I'd be putting a lot of effort into finding a short bed South Bend 9A. In my opinion a 9x17" or 9x22" 9A is probably one of the best common options for a space constrained shop. Heavier, but not a great deal larger than an Atlas 6", or Chinese 7x16" mini lathe. A well optioned small lathe with quick change gear box, and power cross feed. There are even better lathes in this class but much less common. A Myford 7 with quick change gear box would also be on my short list, but the few I've seen go for a fair bit of money and in the US parts will not be plentiful, but Myford is still in business.
Back to your Craftsman, they are not bad small lathes, and I think preferable to many of the cheaper small lathes. Your local market will play a huge part in what is a good price. The fact that this one seems to have had a good life and a proper refurbishment (not just a clean and paint job) and is basically take it home and go to work is worth something.
If this is simply a buy it to learn and then resell in a year or two I'd pass, because it will be hard to even break even if you sell it. If you are pretty sure this is going to fit your needs and will be with you for sometime, then the price is less important. So you over pay by $500, divide that by 10 years of enjoyment and it becomes trivial.
Yes you may find you need a larger lathe down the road, but there is no rule that you can only have one lathe and in fact it is quite common to have two or more (although 9 might be bordering on mental illness
).