Although it’s hard to imagine, there’s actually a tour operator in Reykjavík that specializes in tours for avid knitters. Knitting is big in Iceland. Everyone is doing it.
When you arrive in Reykjavík you will soon notice that every other person is wearing a knitted wool sweater with a similar pattern on top. I believe the technical term for it is yoke. Despite what you may believe,the Lopapeysa army is not a flock of tourists that were duped into buying tacky souvenirs. These hick-chic creations are worn by Icelanders of all ages and with pride. People design their own patterns, develop new techniques and meet with other knitters to share tips and tricks. The lopapeysa is sensible (one of the few sensible items of clothing in the average Icelander’s wardrobe), it’s practical and kind of social.
There are plenty of stores in Reykjavík that sell these woollen gems. Most of them are hand knitted buy human knitting machines that sell them for a small price to tourists shops that then sell them for a considerably higher price. Therefore I always recommend you cut out the middle man and try to buy one straight from the knitter. You can try one of the old ladies in Kolaportið flea market or the Red Cross Second Hand Store in Laugavegur. The sweaters in the Red Cross store have a soul and are bit more retro kitsch but I happen to like that.
So what are you waiting for? Get to it!