One of the occupants died at the scene. Medics took the other to a hospital for treatment of severe injuries, but he later died, fire department officials said. The names of the victims were not immediately available.
The victims were a flight instructor and a student. It is not yet clear which person was at the controls.
The Piper Cherokee had just taken off from the El Cajon general-aviation airport when it went down for unknown reasons about 9:15 a.m., authorities said.
The single-engine airplane clipped the red-tile roof of a home before crashing in front of a next-door house on Paseo de los Castillos in Santee, the Federal Aviation Administration reported.
The aircraft hit two parked vehicles, flipped over and caught fire..
The plane is owned by Volar Corp., an El Cajon-based aviation school, according to FAA records.
Liley, who lives near the scene of the crash, described hearing the engine of the aircraft "sputtering badly'' overhead just before it went down. He looked up to see the Cherokee in the midst of a turn, seemingly as the pilot was attempting to double back to the nearby airport for an emergency landing.
"And you could see he was not going to make it,'' Liley said.
Another neighbor, Tommy McCormick, 13, told reporters he had been home sick, sleeping, when he heard a loud impact that he initially took to be a car crash.
"Then, when I woke up, I heard people screaming, 'fire,''' the teen said.