What throws things off, is that new, more desirable, and more expensive items have appeared, that make things look more expensive. That's one of the concerns regarding inequality; is it okay for some members of society to have nicer things than the lower percentile income earners, as long as that group of lower percentile incomer earners have nicer things than they did 50 years ago? Or should we desire that everyone have (roughly) the same quality of thing, even if it now means that the lower percentile would be worse off objectively if inequality wasn't reduced?
PG just assumes that the goal is to reduce poverty (as in, amount of food, health care, education) for the lower percentile - but I expect there is a not insignificant group of people who are more interested in reducing inequality, even if that means an (objective) increase in poverty.
There is, of course, a third path that he doesn't even mention - and that's reducing inequality by bringing up the lower percentile. As an American, I sometimes wonder if it doesn't even occur to him (he certainly didn't discuss it in any detail in his essay) that you can develop universal health care, education, etc... that provides the same level of service regardless of wealth - which means if the top percentile want (for example) better health care, they end up increasing the level of service for everyone, including themselves.
The essay on inequality seemed to have blinders on with regards to that possibility, though I think he gave it passing mention in a sentence regarding bring the bottom up, but didn't discuss it in any great detail.
Some is very cheap http://www.trulia.com/for_sale/Detroit,MI/10000p_price/price...
And some is very expensive http://homesoftherich.net/2013/05/30000-square-foot-tudor-ma...
If price is the factor, deals can be found.
If this is an age of rapidly improving efficiency then most things should be getting cheaper. The amount of free time and disposable income we have should be increasing. We should be getting wealthier. Instead the opposite is happening for almost everyone save a tiny class of professionals and capitalists. One could be forgiven for thinking we're living in an age of inefficiency and technological decline, since that's what the price signals are indicating.
I'm not sure this is SV or PG's "fault," but PG's rant is smug and non-productive and amounts to a whole lot of "why do they not eat cake?" It makes him sound clueless and out of touch.