Your tenant will then be living in an apartment that continues to slowly decline, then they do decide to leave and you are now paying through the nose on deferred maintenance in an attempt to attract a good quality tenant.....

Decline, because they did not get my prior approval like the contract states?

I think I will do about $120k to $140k for 2023 on the same  property but some of the decline is likely due to having fewer reviews by far than I had in 2019 (from in the thousands to less than 100).

Often times older hotels in declining cities are better served as multifamily.

There has been a decline in the number of existing homes available for sale in Western Washington when compared year-over-year.

So I offered seller financing because the house has been on the market for just under a year and I came with an aggressive offer and they declined stating they didn’t need to sell right away as the unit is currently cash flowing.

Both of those cities have seen declining population growth.  

My question is wouldn't it have been more prudent to decline the M-to-M option and end the lease so that the property could be marketed during a prime rental month like June?

To do right by her, tell her (or have your attorney do it) that you are selling the property and it would be in her best interest to sign a 4 year lease agreement rent free, make sure all correspondence is properly document in the event she declines to sign the lease (won't stop the sale) -- so that if there is an issue down the road between her and new owner you can show judge you approached it in good-faith and without malice; again probably something you should have your attorney carry out and to make sure you're not going to owe more after the sale. 

You wouldn't want to buy into an area that is declining rapidly where the tenant quality is decreasing along with the area.