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Have you priced houses you like? Do you like your location?
Given what's happening with the insanely competitive housing market in Seattle - you could sell your house only find your $110K doesn't do much for you when you're making offer after offer, getting outbid, and losing out to cash buyers. You can wait for a downturn if you like, but considering that these prices aren't being driven by ninja loans - instead there are a ton of well-qualified buyers out there plunking down big bags of cash, so I don't see it imploding anytime soon. Also - many areas in Seattle are seeing house prices escalate at a rate that far outstrips anything but extremely risky investing. So your savings will quickly lose value with regards to what they could buy in this market.
It might be worth it to do some research into the cost of buying what you want vs making your house into what you want.
Sell the house. Look for a new home the you really fall in love. You
can temporarily stay in an apartment while you take your time to
find that special property.
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