I was just reading about this phrase on the WR forum.
Note that all of the people who replied, who were native Spanish speakers, misunderstand what "no kidding" meant here. They interpreted it to be a command, as in "stop joking around," but it is actually a statement, and means "You've got that right" or "Yeah, you're not joking/kidding."
We use this phrase with a sense of resignation. Some situation is bad, and there isn't anything we can do to change it.
Man, it's hot today!
Wow, this place looks dirty.
We can also use it to mean "What you are saying is so obvious."
I'd like to buy a Rolls Royce, but they're too expensive.
So, how would we translate this into natural Spanish'