Cape Carancahua is a on Carancahua Bay, which opens into Matagorda Bay and then to the Gulf of Mexico. Cape Carancahua is a 530-acre private gated residential community that is nestled in between the city of Palacios, Texas 13 miles in and 15 miles out of Port Lavaca, Texas. Property owners benefit from the Cape Carancahua Water Supply Corporation being located and operated within the community.

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