A growing body of literature demonstrates that both place attachment and social capital play considerable, and likely interdependent, roles in disaster recovery. This paper contributes to our understanding of these constructs by presenting findings from a longitudinal, mixed‐methods study of communities impacted by a home buyout program implemented in New York after Hurricane Sandy (N = 111). Results suggest a dynamic balance between place dependence, place identity, and bonding social capital, in which the relative importance of each construct can shift over time, and where losses in one of these areas may lead to cascading losses in the other areas. For buyout participants, increases in place dependence were associated with increases in bonding social capital, indicating that relocatees either regained both place dependence and bonding social capital in their new homes and communities, or they lost and did not regain both, depending on whether their new home and community met their emotional and functional needs sufficiently. For residents who remained in place, higher levels of place dependence were associated with losses in bonding social capital, reflecting the potential consequences of living in postdisaster limbo. Implications for future buyout research, policy, and practice are discussed.