Pay off car or buy house?

[brick]

You should buy a house. That area appears to be a tame housing market so you should have limited risk from a housing market decline. A 30yr fixed loan should have a low interest rate.
You can pay the minimum on the house and the work on the car. In this way you'll control 125k in assets (leverage) for only a small amount of cash. If the housing market goes up 10% in 2 years you make 12k.

Also, since you're young and self employed you may look into buying a duplex. Your renter will pay part of the mortgage which will give you a lot more feedom.

Finally, depending on the interest rates of your car loan vs a home equity loan you may save money each month by paying off your car and getting a home equity loan for the downpayment. (80 conventional/ 15 home equity / 5 down payment) No PMI with this method.