The genre "magical realism" is is mystery to a lot of readers. While some would lump it in with fantasy, I studied it in an academic context and most of the magical realism I've come across really belongs with literature.
In magical realism as I understand and write it, the reader enters a world very similar to our own -- either contemporary or historical -- but with at least one element that is impossible, unlikely, or undiscovered as yet in our world, and which is accepted as everyday truth with no explanation needed within the world of the story.
A lot of readers are really piqued by the aspect of "no explanation" of the unusual elements, but that's the part I love best! For me, real life is pretty darn inexplicable at times, and I love writing that embraces that.
Popular authors of magical realism include Isabel Allende, Alice Hoffman, and many others (largely Latin American). Have you read any magical realism? Did you love it, or did it frustrate you?
My best example of magical realism is my story "Middle Awash in Talent." It's told with the wry humor of an extraordinarily self-centered and unreliable narrator whose sister is "talented," which is to say, she has magical healing powers and the ability to move objects using only her mind (telekinesis). The talents are rare, but are a well-known element of the world in which the story takes place. They have a history of government control, etc, which never has to be fully explained, only hinted at.
I first excerpted "Middle Awash in Talent" a year ago for Six Sentence Sunday. The narrator meets her love interest for the first time in this longer excerpt. Another excerpt, which I have indeed changed substantially since I posted, is here. Mainly you get the tone and narrator's voice from these segments, but I hope you enjoy them! I've finished the first (long) part of this story, and I hope to share it with you in full very soon.