Light aircraft instructor pilot reported descending to 350 feet above the ground on initial arrival into MYF to stay below a cloud layer.

Narrative

My student and I were returning from the East San Diego practice area. It was crowded at the practice area with clear weather; but since there were too many other aircraft; I decided to return to MYF for touch and go's. We obtained ATIS 12 miles out; reporting 1600 foot broken ceiling; lower than the 1900 foot ceiling we took off in an hour prior. As we got closer and called tower for landing on Runway 28L; I saw the overcast extended further east than expected. Realizing we would need to get under it to get to the airport and that doing so would violate SEE Class D; I quickly switched #2 comm to SEE tower with #1 on MYF tower and requested a decent through their airspace; which was granted. MYF told us of traffic ahead and 1 to 2 o'clock that we did not have yet; and continued towards the visual checkpoint of Lake Murray. Just prior to lake Murray; I picked up the traffic ahead and reported it; ATC told us to follow the traffic in. At that time we were doing 115 KTS and the traffic was much slower; so I told my student to slow to 80 and maintain altitude. By this time we were below the overcast. It was then that I noticed on my Foreflight that we were not only below the overcast; but with the rising terrain we were 350 to 400 feet AGL over a congested residential area. I again told by student to hold altitude knowing that the terrain would lower further west. We followed the aircraft in and landed uneventful; but we knew we were too low for the previous area. What caused this error was my failure to relate the 1600 ft. ceiling at the airport with the higher terrain along the final approach path; also that coupled with quickly obtaining airspace transition and searching for traffic. Two things I would have done differently had I realized how far the overcast extended. I would have either turned back east; gained altitude and requested an IFR approach to MYF; or landed at SEE which had scattered clouds and at higher altitude than the broken ceiling of MYF and then obtained an IFR clearance to MYF. Note: MYF and SEE are similar elevations.