Yep, this time last year my bank gave me a bridge loan to purchase my current house. I had a buyer (we went without real estate agents) but I needed a month to renovate the new place so I keep both during that time. Both properties are in probably the most sought after hood in downtown Toronto and my mortgage agent was quite aware of that and drafted the loan without question.
I stayed in the same hood, just needed a bigger place with the kid on the way.