You pay for the most amazing view.
Sitting in the balcony and watching the sunset in the caldera is a unique experience.
Getting to the hotel is not easy, bus from port to Fira and as it was impossible to get a taxi, we had to get another bus to Firostefani and then walk aprox 50 m going up the hill and then going down many steps.
The room is very nice, but roof is quite low so be prepared to hit your head many times!
Bathroom is small.
Breakfast is served in your room by the owner and is quite good.

In summary, you pay too much just for the view, but I think that all hotels with Caldera view are as costly as this one.

Great view, although you have to contend with some telephone lines. But, for the price and location-you can get over it! It's a family run business, so they are very humble and accomodating. If you are looking to get away and not be bothered by anyone-then this may not be the hotel for you. If this is you, ask for one of the rooms on the outside edges of the hotel. We were over the reception desk (directly in the center), so we were always talked to. We didn't mind, because everyone is so friendly. You have to turn the hot water switch on about 30 min before showering, and the toilet had low pressure-but this may be a problem all over the island. Upgrade your room, its worth it. Overall, great place, great view, nice staff!

Things started badly when the proprietor tried to debit my card before showing me the room. You need to watch out for this! Needless to say,I had to reject the first two rooms he showed me while accepting the third (No.7,a funky/quaint studio at the front of the development with a private balcony - most of the others weren't - spotless bathroom and direct views over the caldera (though a telegraph pole and wires partly detracted from the magnificent vista). Watching the sun set over Folegandros was magical. The pool was miniscule so this wouldn't suit anyone intending to spend much time at the property. On the other hand, the location was good, with a minimarket and travel agent a few paces away and several tavernas nearby,quieter I suspect than Fira though you do need a taxi up from the bus station if you have luggage (don't make the mistake of walking along the main road as I did). Breakfast was brought to the room and was OK if uninspired - however,you don't come to a place like this primarily to eat breakfast. All in all, it ended up not being a bad choice for a couple of days,although I am sure that, with a little more research than I managed,you could do much better,at least outside the high season (I only saw one other guest during my two day stay).

We stayed at Efterpi for one night and stayed at Hotel Iliovasilema for two nights (which is in Imerovigli). Efterpi was good value but the view was significantly hampered by telephone and electric wirelines right in front of the hotel. While all of Santirini is fairly cramped in, this place in particular seemed to have all the hotel residents in front of each other.

If you are looking for views, Imerovigli is the right place village to be in -- Fira is 10 minutes walking distance and you are not giving up much convenience. But Efterpi is real value, particularly if you pay cash -- since the family then gives you a discount by avoiding taxes.