Hand from home game

[Baby Mantis]

Okay, pretty straight forward, home game STT 10$ buy-in and no rebuys, just a small starter game. Most of the players are LAG and I mean very LAG with some calling raises all the way to the river with A high and 2 kicker! Villian plays any suited 2 especially connectors. Villian is LAG and sees a lot of flops, but will fold to raises occasionally.

Still 6 players left and I am UTG with AQ with the blinds at 200 and 400, the starting chip count was 10k btw and it is still early with most everyone still hovering around the 8 - 11k mark. I raise it up to 1200 and he reraises to 2200, and I call. The flop brings 4,3,2 rainbow, he bets out 1000....

Now what is the correct move here?

Or should I have reraised pf I was going over that in my head as well, what do you guys think?