Flooding is also possible in areas where rain is heaviest, emergency officials said.
In anticipation of widespread power outages, Gov. Paul LePage signed a "limited emergency declaration" so power crews from other states and Canada can help the state prepare for Sandy. The declaration also extends the hours that power company crews can drive.
Gov. Martin O'Malley said officials in Maryland prepared for the worst.
"This is going to be a long night," he said late Monday. "We're only now just kind of beginning the rough part of this storm. These next 12 hours will likely be the most intense."
Public schools in Baltimore, Montgomery and Prince George's County were closed Monday. Baltimore Mayor Stephanie Rawlings-Blake announced mandatory travel restrictions for city roadways, starting at 6 p.m. Monday.
In the coastal city of Annapolis, city crews distributed sandbags to residents and businesses to help them prepare for flooding.
Obama declared a state of emergency in Maryland on Sunday.
Gov. Deval Patrick declared a state of emergency for the Bay State.
Hoping to avoid the kind of criticism utilities received after last year's Hurricane Irene and other storms, Patrick said utilities plan to pair tree removal and power restoration crews, rather than having them work separately, so that work can be done more efficiently.
Boston announced that schools were closed Monday, and all public transportation services in the city were suspended. Schools were scheduled to be open Tuesday.
Obama also declared a state of emergency for Massachusetts.
"All in all, we're holding our own," Patrick told reporters Monday afternoon. "I think it's going well, but it's nature, and it can change in a minute."
Sandy could bring winds of up to 70 mph and dump 1 to 4 inches of rain to parts of the Granite State, Gov. John Lynch's office said.
Lynch urged drivers to stay off the state's roads and asked employers to release workers early Monday afternoon to avoid travel after 3 p.m. when high winds and heavy rains were expected to intensify.
"This will be significant storm for New Hampshire, and we are urging all citizens to exercise common sense and extreme caution," Lynch said in a statement after declaring a state of emergency.
The governor asked the National Guard to place 100 troops on active duty, with 100 more on standby.
Two people in Morris County were killed Monday evening when a tree fell on their car, authorities said. A male of unknown age was also killed in Hawthorne when a tree fell on a house, according to Hawthorne Fire Chief Joseph Speranza.
Several feet of water were flooding parts of Atlantic City on Monday, and authorities worked to evacuate hundreds of people from West Atlantic City, where waters were "dangerously high," said Linda Gilmore, a spokeswoman for Atlantic County.
Atlantic City was under curfew from 6 p.m. Monday until 6 a.m. Tuesday.
"When Mother Nature sends her wrath your way, we're at her mercy, and so all we can do is stay prayerful and do the best that we can," Atlantic City Mayor Lorenzo Langford told CNN.
He said the city could get as much of 5 feet of water, and video showed downtown streets looking like rivers.