Common problems for herbs brought indoors are too little light and too much water. Could one of those be your problem?

FataMorgana

It might also be too warm for it indoors and the atmosphere might be too dry. Bay can take quite low temperatures and doesn't need to be much above freezing in the winter. The new growth is not necessarily a good sign - the plant should be resting now and not trying to grow during the winter. You want it to be just ticking over gently. Do you have an unheated sunroom or something similar where it could go?

In Wisconsin the winter temps dont get above freezing and most of the time dont really go too far above 0 or below. :) But yeah I could have watered it too much and actually have not watered it in over a week and the soil still feels moist on top. It could also be lack of sun light because out house only has windows on the noth and south sides. Not a good place to grow anything that needs sunlight. As for it being too dry in the house that is possible but we do have a humidifier going which registers between 40-55 % relative humidity most of the time.
So basically I should just keep up with the not watering it until the soil is really dry and hope for the best? I dont want to have this thing die on me before I can get it back outside in May/June when temps are steady.

If your temperatures don't go too far below freezing, I think it'd be much better off outside. In the UK bay trees over winter outside, including those grown in pots. It might suffer if suddenly put out now though, so all you can do is put it in the coolest place possible and mist with water occasionally so the leaves don't dry out.

yeah like I said Wisconsin in winter is a frozen tundra. If we get above freezing it is a major heat wave. Temps here usually hover in the teens or below zero. :) So out side this tree would become a freezy pop. :)
I will try misting the leaves with water and only putting water in the pot when the dirt is completely dry. Any thought to whether or not I should be adding fertalizer to the dirt? Or should I just try to repot with fresh soil every year?

Yeah, Wisconsin makes my winters in Western NY State seem down right balmy and tropical. Bay won't survive outdoors for me and surely not in the colder winter of Wisconsin.

The confusion may be in that mathewc is speaking of temperatures in degrees Fahrenheit and not Celsius.

As far as bay...it is a tree so I would have a very well draining soil for it. Probably something similar to a bonsai soil mix. But other than that, I can't tell you much. I've never grown bay.

FataMorgana

Ah, thanks for clarifying. I had thought mathewc meant zero C!

I don't think it's a good idea to feed it whilst it's indoors as you don't want it to grow quickly in the winter. In spring, remove as much soil as you can and replace with fresh and when it needs it, put it in a bigger pot. Feed the plant throughout the growing period, but never give more than is suggested on the pack - as you'll want to keep the tree compact, I'd give the feed in slightly weaker than usual doses.

Yeah after the second time someone mentioned "oh well if it isnt getting too far below freezing..." I thought maybe they think I am talking about 0 C which is 32 F :) ... Yeah in Wisconsin (even southern) the winters are a lot harsher than in the UK. In December we got dumped with 17 inches of snow in one day and have had a dozen or so days where the temps were well below 0 F with the wind chill. :) The poor Bay tree would think I was punishing it by putting it outside. ;)
Ok well hopefully it survives until spring then I will put looser dirt or maybe mix rocks in with whatever dirt I use to repot it. That should allow it to drain a little easier. I just dont like seeing leaves dry ON the plant when the dirt is moist. Some of them are completely dry in that I could pluck them and put them with the other pre-packaged dry bay leaves without fear of rot.

Mathewc - I had realised you were using F not C and that your area is probably colder than I can imagine. But I still think your baytree is too warm and that if you can find somewhere cooler like a spare room or porch it would be happier. I also think the misting is a good idea. The humidity where I live is 98% today and the temperature is about 43f. There are a lot of huge baytress growing outdoors round here (By which I mean over 20 feet). So that shows you the kind of winter conditions you should be aiming to recreate indoors.

Bay trees do lose their older leaves as the new ones arrive. I'm not sure you have a problem. I have a Bay tree outside here in central CA. The summers are very hot and very dry and a lot of water is needed. The older leaves do die off quickly if not enough water. The tree survives what serves as our winter down to an occasional 32º F and even lower. However, my tree is next to the heat-mass of the stucco house which helps in the cold. I've lived in Wisconsin and the Bay won't survive outside there.... if I'm understanding others comments correctly.

I have a neighbor with a Bay that's at least 20' tall.

I don't know anything about growing bay trees, but I am getting into container gardening, and as such, spending a lot of time in the Container Gardening forum here. My guess would be that your bay tree would do much better in a more gritty soil for better drainage. I invite you to go to the other forum and read up on "Al's Gritty Mix" & "Al's 5-1-1 Mix." Al is a bonsai grower, and knows a TON about container soils. Hope this helps!

Mathew, I've got a container bay too. And I'm in a cold climate. There may not be anything wrong with yours. I'd advise you to wait and watch.

Mine naturally loses a few of the oldest leaves each year. If I leave them alone, the leaves that are on the way out yellow a little and then dry out. I've had this tree over ten years. Like you, I got worried the first time I saw this. Now that I know its routine, I pull the dying leaves off as soon as I notice them yellowing, and use them for cooking. It is odd that yours is growing now, though. My bay normally begins to put out new growth towards spring, March or April. I only feed when I see active growth, and only if I did not repot that year. I keep the tree indoors except for the summer, usually June through early September.