I've just finished re-reading one of my very favorites - NEVERWHERE by Neil Gaiman. It's a fabulous fantasy set partly in London and partly in an alternate London - "London below." Richard Mayhew, everyman extraordinaire, finds himself sucked into a classic hero's quest in an inventive reality neither he nor any of the other "normal" people in the city above ever knew existed.
Neil Gaiman is a master of setting fantasy into reality like a gem in a ring. It sparkles, it catches your attention, but it looks like it belongs there. He's just phenomenal. If you haven't read anything he's written, NEVERWHERE is a good start. CORALINE would be a good next step. It's written for kids, sort of, but it's the scariest freaking book I've ever, ever read.
I'm on sort of a re-reading kick right now - adult and YA and MG. I do that once in awhile, which is good for the book budget and good for me as a writer. The second or third time through a book, I notice how the author has done what they've done. The first time through I tend to get too sucked into the plot to see that stuff. I'm the world's most eager audience - willing suspension of disbelief is something of a specialty for me.