Some observations about magical realism, collected over years of reading it and occasionally trying to write it:
The best magical realism examples don't announce themselves. A ghost shows up and nobody screams. A woman's cooking causes physical transformations in the people who eat it and the narrator just keeps going, same tone, same rhythm. The magic isn't the point. The refusal to treat it as unusual is the point.
In Beloved, Toni Morrison opens with a sentence about a house being spiteful. 124 Bluestone Road is haunted by a dead baby's ghost, and the characters live with this the way you'd live with a bad neighbor. They're annoyed by it. They accommodate it. Morrison never pauses to explain the rules of her ghost or build a system around the haunting. The supernatural just sits inside the domestic, and somehow that makes the history it carries hit harder than any realist novel about slavery I've read.
Magical realism is not fantasy with a literary coat of paint.
I think the distinction matters and I think most people get it wrong. Fantasy builds worlds where magic has rules. Magical realism describes our world and simply refuses to agree that certain things are impossible. The magic in fantasy is systematic. The magic in magical realism is atmospheric. One asks you to learn its logic. The other asks you to abandon yours.
Laura Esquivel's Like Water for Chocolate is the clearest example of how this works at the sentence level. Tita cooks with grief and the wedding guests all begin to weep. She cooks with longing and the guests become flushed with desire. The food is literal and the emotions are literal, and the connection between them is presented as fact. Esquivel doesn't use metaphor. She uses cause and effect. The magic is in treating the impossible as merely physical.
Morrison once said, "If there's a book that you want to read, but it hasn't been written yet, then you must write it." I keep coming back to this because it explains something about why magical realism exists at all. Certain experiences, certain histories, certain ways of being in the world don't fit inside realism's rules. The form had to bend to hold what these writers needed to say.
Julio Cortazar's stories bother me in a way I can't fully resolve, and I mean that as praise. "House Taken Over" describes two siblings slowly retreating from room to room as something unnamed occupies their house. He never tells you what's taking the house. The story ends with them locking the front door and tossing the key into the sewer. I've read it four times and I still don't know if it's about political displacement, psychological collapse, or something I haven't considered yet.
The tone is everything. You can put a supernatural event in a realist story, but if the prose flinches, if it shifts register to signal that something strange is happening, you've written horror or fantasy or fable. Magical realism requires the prose to stay completely calm.
Most failed attempts at magical realism fail because the writer is too excited about the magic.