I love to watch people. It's something I've enjoyed for most of my life.
I was very shy as a child, so I often found myself in the enviable position of being overlooked when others were having private conversations. I heard things others didn't. I saw things others didn't. I enjoyed getting to see these private sides of people, so as I got older, I continued to keep my mouth shut, and my eyes and ears open.
Now that I'm older, being this kind of observer has been beneficial to my writing. I still see these private sides of people, and when I do, they are somehow transformed into characters begging to be included in stories. I know it's a writer thing to see characters and stories everywhere, and I'm thankful for that. After all, it's because of my observation I have the coffee house book characters that I do. Most of them are inspired by people I have seen, talked to, or known in my adult life.
Like visual artists, writers see things others don't, and in ways that others don't. And just because you don't write realism doesn't mean you can't use the people and relationships you see every day as inspiration for your stories. Even invented worlds need an element of truth in order to for readers to relate to them, so even non-realism stories can draw on that quirky cashier you chatted with last week, or the always-on-his-phone guy that drops by your neighbor's house sometimes.
If you want your characters to seem real, using real people as an inspiration is a good start!
Of course, you'll want to change the character enough that he or she is unrecognizable, and hat he or she fits into the world of your story. Usually it involves changing more than just a name. But you have to do what's true to your story. Look at the character sketches you've created from your observations and flesh them out. Lots of writers have great advice on how to create characters. Robert Atkinson also has an amazing life story interview in his book The Gift of Stories that I frequently use as a character biography interview.
Regardless of how you create your characters, it all starts with someone you see, or some character trait or quirk that caught your eye (or ear) and just screams, "Put me in your story!" So just keep your eyes and ears open, and your story world will be populated before you know it!