Contemporary Realistic Children's Picture Books is a very popular genre. Though the stories are rooted in reality (could actually happen), the characters are fictionalized.
These picture books focus on a myriad of problems facing children's lives today. They range from having a new sibling, living with two mommies or daddies, bullying and multiculturalism to belief in self, belief in angels, fear of the dark, loneliness, illness, death, moving, physical or emotional disabilities and peace.
Although the range and potential for storytelling are huge, the personal or "real" situation is the jumping off point. The storyline arises from your imagination.
As in all picture books, realistic picture books are short, with a word count of less than a thousand words. The books themselves are usually thirty-two pages, which doesn't include the title, dedication and copyright pages. This leaves you twenty-six pages to "show, not tell" your story. And not every page needs words.
It is an imaginative story and believable characters (human or otherwise!) who drive the story. Don't rhyme. Don't moralize. Don't preach. Any lesson you make will be best if it comes as a surprise even to you!
Take time to explore realistic children's books in your local library and bookstores. Exploring online isn't the same as holding the book and being drawn into the words and illustrations!
Take risks. Have fun! No matter how serious the issue is in the book, trust the imaginative children's book writer in you!
I'd love to guide you on your journey of writing for children, no matter their age. I've sold five books for children and YA Readers to major publishing houses, and know Children's Book Writing from A-Z.