What should I do with properties with significant gain (Seattle)

[Jason Woods]

I live in the Seattle area, where I have a couple of SFH rental properties which I bought a few years back, now they all have significant appreciation due to the red hot Seattle market, now I'm trying to figure out the best strategy forward.

I don't want to sell because of the significant tax hit; doing 1031 exchange is also problematic since I don't find anything attractive in the Seattle market today; the cap rate on the rental is about 3%, pretty miserable. After years of rapid growth, the Seattle market is also clearly slowing down (although I don't think we will have a crash, probably flat or slow growth for the next few years). 

Any ideas and suggestions? Thanks in advance!

Buddy