Hmm... I know some younger readers enjoy Tolkien's The Hobbit (which is written for a younger audience than LOTR) - can't get much more epic than Tolkien.
And they're a bit older, but Lloyd Alexander's Chronicles of Prydain might be what you're after. Set in a fantasy world reminiscent of mythical Wales, they read a bit dated today.
Brian Jacques's Redwall series may be about talking animals, but it has most of the earmarks of epic fantasy, and I know younger readers enjoy it. (In that vein, Erin Hunter's Warriors books - the secret lives of feral cats, who don't wear clothes or use swords like the mice of Redwall but still have myths and culture and a touch of magic about them - have a certain epic flavor.)
Tamora Pierce's books might qualify as upper MG; her Tortall books feature strong females in a magical, medieval world, and her Circle of Magic books (the original quartet, at least), are fairly decent, as well. Both establish interesting worlds and have distinctive characters.
Suzanne "Hunger Games" Collins wrote a series about Underland (starting with Gregor the Overlander), a modern, somewhat dark "other world" beneath a modern city, which is more MG than her Hunger Games trilogy.
Charlie Fletcher's Stoneheart trilogy reads like Neil Gaiman's Neverwhere for MG/YA audiences: a boy breaks a stone carving off the side of a museum, and finds himself plunged into the invisible war between London's statues and gargoyles.
I'd also recommend the Rhyme of the Willow series (first book: Shadowbloom) by the Sullivan brothers - it may only be available as an eBook, though. Twins find themselves pulled into a dark world where plants run amok... and where strange plant/human hybrids stalk the shadows.
As for magical realism... MG, YA, or adult, it's not really my thing (I prefer my fantasy to straight-up admit it's fantasy, and the little magical realism I've read likes to pretend it's not really fantasy while having fantastic elements - MHO, naturally), so I can't help there.
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