It is a simple formula. Low interest rates produce large home sales.

The formula held true in 2003, with Douglas County home sales soaring to a new high, according to figures compiled by the county appraiser’s office.

Paul Forio, of the Lawrence Board of Realtors, adds a sold sign to a recent sale along West Sixth Street.

The county recorded 2,065 sales in 2003, which was 9 percent higher than the previous record of 1,888 set in 2001. The 2003 mark also was 13 percent higher than 2002 totals.

“It was our best, our biggest and our greatest year ever,” said Gary Nuzum, managing broker of Coldwell Banker McGrew Real Estate, which posted sales gains of about 20 percent for the year.

Interest rates for 30-year mortgages hovered well below 6 percent for most of the year. Bryan Hedges, president of Lawrence’s Realty Executives Hedges Real Estate, said the rates spurred a variety of people to jump into the market.

“We a saw a lot of people retire here, and we saw a lot of people who were renting decide to buy,” Hedges said. “It was definitely a good year for first-time home buyers.”

Nuzum said the market also had more investors buying real estate as an alternative to the stock market.

“We saw a lot of investor money step forward in 2003,” he said. “It is pretty hard to know who to trust on Wall Street anymore. I think some investors want to be more in control of their investments.”

Thus far in 2004, home sale totals have been slightly below last year’s levels. But real estate professionals still are predicting a strong year.

“As long as interest rates stay below 7 percent, I don’t see any reason why we won’t have a record year or something very close to it,” said Deborah McMullen, a real estate agent with Coldwell Banker McGrew Real Estate and president of the Lawrence Board of Realtors.

The strong demand in 2003 did push sale prices up in the county, according to records from the appraiser’s office. The average price for a home in the county was $168,935, up 6.8 percent from $158,092 in 2002. Since 1998, the average price of a home has increased 35 percent, or an average of about 5.8 percent a year.

According to the county’s numbers, North Lawrence was among the strongest markets in the county. Sales north of the river increased by 39 percent from a year ago, the largest percentage in the county. The number of sales in the rest of Lawrence increased by 9 percent.

Real estate agents said North Lawrence’s appeal was its prices. The average sale price there was $103,161 — or about $40,000 less than homes in Baldwin, the area with the second least-expensive average.

“It is still a good place to get a good value for your dollar. That’s what’s driving it,” said Cindy Folsom, an agent with Stephens Real Estate who handles a large number of North Lawrence listings. “If there was a grocery store or a Walgreens over there, North Lawrence would really take off.”