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KILL DEVIL HILLS, North Carolina (CNN) -- Larger than the state of California, Hurricane Earl prepared to take a swipe at the Eastern Seaboard on Thursday as residents scrambled to ready themselves ahead of its arrival.

Hurricane warnings and watches stretched from North Carolina to Delaware and into Massachusetts, where a hurricane warning was issued for Cape Cod, Martha's Vineyard, Nantucket and the surrounding area. A hurricane watch was also issued for the coast of Nova Scotia, Canada.

President Barack Obama signed a disaster declaration for North Carolina on Wednesday evening. The action authorizes the Department of Homeland Security and the Federal Emergency Management Agency to coordinate relief efforts, and makes federal funds available. Maryland's governor issued an emergency declaration earlier in the day.

The monster storm is forecast to pass close to North Carolina's Outer Banks on Thursday night, the National Hurricane Center said. It is expected to take aim at southeastern New England on Friday night. The storm's track shifted slightly to the west, closer to North Carolina's Cape Hatteras. The National Hurricane Center has posted storm watches and warnings for areas as far north as Maine.

Officials in Dare County, North Carolina, issued mandatory evacuation orders Thursday for visitors to the coastal county, including the Outer Banks. The mandatory evacuation extended to residents in some areas, including the town of South Nags Head and Hatteras Island. Dare County schools and courts were closed Thursday and will be closed Friday.

"Residents along the oceanfront are advised to relocate due to coastal flooding and ocean overwash that will occur," the county said in a statement.

"Residents of Dare County have been through this many times," the county's emergency response coordinator, Warren Judge, told CNN's "American Morning." "And they have their own individual practices and procedures to get their homes and businesses secured and prepared for the oncoming storm. What we need to happen now is for the visitors to heed the warning, to evacuate."

As of 2 p.m., the center of Earl was about 245 miles (395 kilometers) south of Cape Hatteras, North Carolina, and about 720 miles (1,160 kilometers) south-southwest of Nantucket. It was heading north at about 18 mph (30 kph).

Earl was downgraded to a Category 3 hurricane, with maximum sustained winds of near 125 mph (200 kph). However, "Earl is expected to remain a powerful hurricane as it passes near the Outer Banks," forecasters said.

Earl is also a large storm, meaning effects will be widely felt even if it does not make a direct hit. It covers about 166,000 square miles -- larger than California, which covers just under 160,000 square miles. The storm's outflow, or the clouds associated with it, could stretch from one end of the state of Texas to the other, said CNN meteorologist Reynolds Wolf.

The North Carolina coast should begin experiencing tropical storm-force winds of at least 39 mph by Thursday afternoon, forecasters said, with hurricane-force winds of at least 74 mph arriving later in the day.

"Conditions are going to deteriorate rapidly," FEMA administrator Craig Fugate said Thursday, and people should not be lulled into thinking Earl is going to miss them.

Large breaking waves of 10 to 15 feet are possible along the coast, with possible storm surge of 2 to 4 feet and 3 to 4 inches of rainfall, CNN meteorologist Sean Morris said. Isolated tornadoes and waterspouts are possible.

The National Hurricane Center said those in the hurricane warning area -- coastal North Carolina from Bogue Inlet up to the Virginia state line, including Pamlico and Albemarle sounds -- could see storm surge of 3 to 5 feet. However, the most severe part of Earl is expected to remain offshore, which might mean a lower storm surge, according to CNN meteorologist Rob Marciano.

"The fact that it happens overnight always gives us cause for concern," Judge said. "But we're going to get a glancing blow." Hopefully, the storm will not deal a direct hit to the area, he said, and will pass through quickly.

"This is my first hurricane and I'm looking forward to it, " said Sarah Baker, a native of Oklahoma who works for a vacation rental company in Kitty Hawk, North Carolina. "The locals have been really nice, telling me what I needed to buy to get ready."

She said it was "just starting to get cloudy" about 10 a.m., but people were still out surfing.

"The rip tides are really getting strong, so I don't think they'll be able to stay in much longer," she said. "I saw this one guy who went into the surf and just a couple of minutes later he was a quarter-mile down the beach."

A tropical storm warning was issued Thursday for an area from New Haven, Connecticut, to west of Westport, Massachusetts, including Block Island.

A hurricane warning was already in effect from Bogue Inlet, North Carolina, northeast to the North Carolina-Virginia state line, including Pamlico and Albemarle sounds.

And tropical storm warnings were in effect from Cape Fear, North Carolina, to west of Bogue Inlet; the coast of Long Island,

New York, from Fire Island Inlet north and east to Port Jefferson Harbor; and from the North Carolina-Virginia border to Sandy Hook, New Jersey, including Delaware Bay south of Slaughter Beach and the Chesapeake Bay south of New Point Comfort.

A hurricane watch is in effect from the North Carolina-Virginia border north to Cape Henlopen, Delaware, and for the coast of Nova Scotia from Medway Harbor to Digby.

A tropical storm watch was in effect for north of Hull, Massachusetts, to Eastport, Maine; the coast of Nova Scotia, Canada, from Port Maitland to Medway Harbour; and for the coast of Long Island west of Fire Island Inlet and Port Jefferson Harbor. A tropical storm watch was also issued for New Brunswick, Canada, from just west of Fort Lawrence westward to the U.S.-Canada border.

Rip currents and stormy seas were reported all the way up the East Coast, from Florida to Maine.

Earl will make its closest pass to New Jersey on Friday afternoon as a Category 2 hurricane, Morris said. It is expected to make its closest pass to Cape Cod, Massachusetts, on Friday night as a Category 1 hurricane.

The long duration of tropical-storm-force winds threatens widespread power outages in parts of the South and the mid-Atlantic region, he said.

Earl is expected to make a direct landfall over southern Nova Scotia on Saturday morning as a strong Category 1 hurricane.

The storm will turn northeast as it collides with a cold front, said National Hurricane Center director Bill Read. But the hurricane was undergoing a phenomenon known as eyewall replacement, in which the existing eyewall weakens and a new one forms. That means the eye likely will grow in diameter and the storm will grow even larger as hurricane force winds stretch farther out, he said.

Fugate said Wednesday he had briefed Obama on what the agency is doing in preparation for the storm. Teams are in place or on standby to assist each state along the East Coast, he said, and supplies were being moved into two incident-support bases to be available if they are needed.

"We're very ready, as ready as anybody can be," North Carolina Gov. Bev Perdue said Thursday. "We feel comfortable this morning that we have in place the resources and the supplies and the capacity to do whatever it takes."

Some National Guard troops have been activated, she said, and more are on standby.

Several airlines said Wednesday that passengers to and from cities along the Eastern Seaboard, from San Juan, Puerto Rico, to Bangor, Maine, could reschedule travel in coming days without penalty. Though they have not announced cancellations, Air Tran, American Airlines, Continental Airlines and Delta said they would waive reschedule fees for such travelers.

Purdue urged residents and visitors to prepare for the storm and heed evacuation orders. Indeed, some people were stocking up on food at grocery stores and attaching plywood to windows and doors of coastal homes. However, others thumbed their noses at Earl, set to arrive just ahead of the Labor Day holiday, and said they were staying put.

"We're from Michigan, so we're used to storms," one man said. "But this is our first hurricane, so we're kind of excited about it and hope everything goes well."

"I got three bottles of wine hidden in there," another man said, gesturing toward his grocery bags. "The kids are good with the milk." He said Earl "might ruin some beach time ... looks like it's OK, but we'll keep an eye on the TV."

One sign on the Outer Banks warned, "Earl, you are not welcome here."

Marciano, however, warned residents and visitors that Earl should be taken seriously. It's been a decade since a hurricane of this magnitude bore down on the Outer Banks, he said, and the highway linking the area to the rest of the state could easily be covered by waves.

The time for preparation, especially for those in North Carolina, is running short, FEMA's Fugate said. "Don't wait for the next forecast. Today is a day of action."

He said FEMA is "getting ready for this storm no matter what happens." The agency for several days has been moving supplies and teams into states in preparation for Earl's arrival.

According to changes put into effect after Hurricane Katrina devastated the Gulf Coast in 2005, FEMA no longer has to wait for an emergency declaration in order to begin assistance to affected areas.

Fugate urged those in New England, who may not be used to hurricane preparations, to find out what their community plan is and whether they are in an evacuation zone -- and to figure out where they would go if an evacuation order is issued.

The storm was moving quickly, Marciano said, which is a good thing -- "we need to get it in and out of here in a hurry."

Conditions can change quickly, Perdue said. "You can feel like at midnight the storm isn't going to do anything, and by 12:30 or 1 o'clock, it's going to be right on top of you."

"We've done this before, and with any kind of certainty we'll do it again," she said. But she noted it is up to residents to be prepared.

"This thing is enormous," Wolf said. "... It's going to pack quite a punch."

-- CNN's Angela Fritz and Randy Harber contributed to this report.

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