But you’re asking the seller for a price reduction on their end to go towards your rate for the next 2 years.

Had that happen on my primary residence once because the mortgage company overestimated my tax bill by ignoring the reduction allowed by the homestead exemption, which would apply because this is your primary home.

We gave a 7k reduction to our excellent owner financed tenant due to declines in the market and the well collapsing after 4 years and my CPA did not ask for 1099C information on the tenant for that loss hhmmm.

If this is of interest to you, I would suggest looking into furnishing it yourself and then turning it over to a STR Property Management company, you would be cutting out the middle man and essentially doing the same thing for (hopefully) more money.Whether you rent to someone arbitraging the property or utilize an STR property management company, you are “paying” the cost of a middleman; one way through an expense item and the other way through a reduction of income.  

Price reductions, increased DOM, reduced number of offers, reduced quality of offers, and my personal favorite metric: How much is my phone ringing?

As a real estate agent in the area of Boone/ Banner Elk/ Beech Mountain and many other towns in the area, I'm seeing listings staying on the market a little longer than before and each day I see a handful or more listings do price reductions.

Again I’m a simpleton factory worker but what I see in working class has been a huge reduction in wealth. 

Do I pay tax on the entire $14,500 from the sale in 2019 (according to IRS) or just 3,000 down payment as profit (I assume down payment is pure profit and not a reduction of basis?)

A lot of lenders do have LTV reductions for properties that are located in an area which the appraiser deems a declining market, but that is in reference to property values and not STR data.

Assuming no appreciation, or depreciation, you need to figure 4% in principle reduction each year. (4%* 5 years + your existing 5%) Keep in mind, refinance appraisals are typically tougher to "hit your number" because they go in with no preconceived purchase price to comp to.