@K101 It could have been the host's error in not keeping her pricing up to date, or it could have been some tech glitch on the site- not uncommon. But as others have said , not the guest's problem, but the host's. If you're still within the 48 hour free cancellation period, you could decide to be real nice and cancel yourself (although, as you say, it would use up one of your 3 service-fee-refunded cancellations), especially considering that you say it's a booking in the future and you still have time to find another place, but technically, it's definitely the host's responsibility to cancel.
Was this a new listing? If so, that could have been why it was so much cheaper than identical units in the same building. New listings get some discounts applied to them, and often the inexperienced host isn't aware of that, then is shocked to find out what the guest was charged.
New hosts, just like new guests, should always be given their first chance, not just rejected because they don't have any review history, but it's also true that you have a better chance of things going smoothly if you look for established listings with good reviews and not just for the least expensive place. If you are wanting to book a place that's a new listing, it would be wise to first send an Inquiry message to the host to make sure all feels okay, rather than Instant Book it.