Is it a grammar issue or not?

Try it this way:

What a fantastic city!!! I lived there but only noticed that now by looking at your photos.

The use of the word "that" can sometimes be ambiguous. This problem could be avoided by saying:

What a fantastic city!!! I lived there but only now noticed how fantastic it is
by looking at your photos.

Thanks for the explanation and the correction!

From what you wrote I suppose that my friend's comment was to point out that my statement was grammatically incorrect. Would you agree with that?

I’m asking this due to my other question which was included in my post and to which I'm referring in the topic of the post. My other question sounded as follows:

“I'm not sure, is my friend referring to a grammar issue or criticizing me being ignorant to places where I live?”

I think he was gently teasing you about your incorrect usage; I strongly doubt that he thought you didn't know where you had once lived.

Hope that helps.

Friend: I don't think you DO notice when you live somewhere!

I think he was agreeing with you that one often doesn't notice things where they live.

Certainly not criticizing or judging you.

Thank you very much!

As I’m not a native English speaker I definitely wanted to hear someone else’s opinion about the meaning of my friend’s reaction. If my wording in English is awkward or a little strange I’m happy to be corrected as this is the only way of learning. We only shared these two sentence (mentioned in my post) nothing else, but in my interpretation my friend’s sentence could have multiple meanings.

You Sure?

"I think he was agreeing with you that one often doesn't notice things where they live."

I didn't think of that one as an option, although this is a very common thing to say. This would also give a positive interpretation to the dialog.

So you would exclude the grammar issue, meaning even if my sentence was not the best English that's not what my friend wanted to point out?

Just for completeness I'm a he, my friend is a she, we were colleagues in her home town six years ago. Then I moved back home and since then we haven't met or talked. Now she made a post that she visited my home town and we shared these two sentences. As I mentioned in my post she is native English and I live in a non English speaking country.

That's how I interpreted the exchange. And that's all I have to say about it.

As Mame has correctly noted (while hightor completely failed to comprehend the gist of your question) your correspondent has simply observed that every day, commonplace surroundings are not necessarily appreciated.

It has nothing whatsoever to do with grammar.

It is as Mame says

When your friend said "I don't think you do notice when you live somewhere!", your friend was not refering to you, the word "you" as used here is a general term to mean anyone or everyone

Perhaps it should have been

I don't think anyone notices when they live somewhere!

That's very possible, but the fact that he actually thought his friend might have been criticizing him suggests that it may have been expressed in a critical tone of voice. These sorts of cues are obvious in real life but missing in a strictly verbal context.

True, I was being a bitch.

Thanks to all who commented on my question.
I found all comments helpful and supportive. Yes, the youtube videos too