Check books like The Borzoi Anthology of Latin American Literature, and you will find earlier examples. Meanwhile, I think it was Carpentier who was one of the earlier proponents for modern fiction in the region.
I'm currently reading a Brazilian novel by Machado de Assis (1839-1908). I think we can all agree, until evidence to the contrary, that Brazil is in Latin America. The novel is
Esau and Jacob (1904). It opens with two women walking a street stealthily to go see a fortune-teller. Their fear? That public opinion will think they're silly for believing in superstitious nonsense like fortune-telling.
Do you know that every year the Church in Latin America still confirms several special happenings as miracles? Usually they concern Christian believers who see statues crying tears of blood. There's nothing extraordinary about this: the Church reports identical miracles every year in Europe and the USA. But if Latin Americans were that comfortable with the magical in the everyday, why would they give these events special importance? Why would they rush to the report to the Church authorities that they just saw something out of the ordinary? After all, a "miracle" by definition is something out of the ordinary.
I'm amazed at the resistance to the idea that Latin Americans have the same approach to the supernatural as Americans and Europeans - "Westerners" in general. I understand Gabo and crew had to sell their brand to stand out from competitors in Europe and the USA; that's just sound marketing skills; Gabo was an expert salesman as Alvaro Santana-Acuna thoroughly showed it in
Ascent to Glory: How One Hundred Years of Solitude Was Written and Became a Global Classic. But it's weird how many people treat an amusing gimmick designed to sell books as a profound insight into the Latin American mindset.
Are you aware that before "magical realism" became a trend in the 1940s, Latin American literature was predominantly realist/naturalist? It had its Balzac imitators, its Flaubert imitators, its Zola imitators. They took their cues from whatever news they received from Paris. If Paris said literature was Flaubert, they wrote
Madame Bovary knock offs; if Paris said Zola was out and Huysmans was in, they started churning out Symbolist novels. Of course those novels were never translated into English nor attract the attention of Anglo-American academics, who continue to pretend Latin America since its inception was producing magical realism by the cartload. It makes me wonder how the Argentinean critic Rita Gnutzmann managed to write a whole book about Argentina's naturalist fiction,
La novela naturalista en Argentina (1880-1900) (1998).
Or how Juan Armando Epple Orellana found four naturalist novelists to make his study
Cuatro autores naturalistas de America Latina: hacia una caracterizacion sociologica de la novela naturalista (1980)
Or how Oswaldo Voysest managed to write a comparative study between the naturalist Peruvian novelist Mercedes Cabello de Carbonera and her influence Zola:
El naturalismo de Mercedes Cabello de Carbonera frente al de Emile Zola: contradicción, innovación y replanteamiento (1997)
Need I go on? How many studies of 19c Latin American naturalism will it take to convince you?
Latin American fiction followed exactly the same phases as European fiction: Romanticism, Realism, Naturalism, late 19c Symbolism, early 20c modernism/avant-garde, 1930s socialist realism. "Magical realism", as I've explained elsewhere, was a label popular in Europe between the wars before it migrated to Latin America. In those years Europeans were already beginning to realize that one way of renewing fiction, which had run out of novelty because realism was exhausted (as Huysmans pointed out in the 1880s when he abandoned naturalism), was to mix realism with the oneiric, the bizarre, the fantastic, the magical. That's why after 1900 Kafka turns to fantasy in
The Metamorphosis; why Woolf writes the story of an immortal,
Orlando; why Sylvia Townsend Warner makes an ordinary woman discover witchcraft amid a domestic context in
Lolly Willowes (1926). The fantastic, which used to belong to fiction marked as "entertainment", more and more started making incursions into semi-realistic books with literary ambitions, dissolving the artificial barrier between low and high culture.
This is a richer and more nuanced explanation of why magical realism was born than simply parroting the obtuse claim that Latin Americans are inherently, even fatalistically prone to producing magical realism. That's an unfortunate prejudice because it means all the fine writers who never showed any interest in magical realism, or were active before it was invented in the 1940s, are doomed never to be known outside Latin America, because they don't meet expectations of what "real" Latin American fiction is.